Senior executives in the UK's biggest companies have seen their average earnings go up by more than a quarter in the past year.

New research suggests the bosses of top firms made an average of £4m a year.

But Incomes Data Services, which compiled the figures, says pay and bonuses have hardly risen at all.

Instead the increase is due to a rise in value of long term incentive plans which have replaced cash bonuses.

The study looked at the earnings of directors of the 100 largest companies quoted on the London stock exchange, in the 12 months to June.

It showed that increases in basic pay and bonuses slowed almost to a halt - with pay rising in line with inflation, and bonuses falling.

However, earnings still increased by an average of 27%, largely due to the introduction of long term, share-based incentive plans for executives.

These plans - which are now used by 90% of top companies - are designed to match bonuses more closely to the return that shareholders make, says BBC business correspondent Jonty Bloom.

I am surprise. 'We're all in this together'.

That was my first thought. Most people are facing wage freezes or benefit cuts and yet the top are still getting pay increases to incentivise them to work harder.

Increases in basic pay and bonuses slowed almost to a halt - with pay rising in line with inflation, and bonuses falling.

Are you sure you haven't misunderstood the article? It specifically says

The increase in earnings are because of the increase in value of shares/share options that were awarded to them IN THE PAST. That's actually a good thing. Def. better that just getting a large basic salary and bonus for just turning up. Awarding share incentives is better because they actually have to work to increase the share price.

But I guess people will complain no matter what.
So, as you were...

Yes but much of the value in shares recently have had little to do with company performance and more of the flows of QE into the stock market. So if the Bank of England stops QE then those shares will become worth a lot less.

You assume it is as simple as that, it is not. There is a way to adjust for these things, e.g. relative performance to a benchmark, competitors etc...

Awarding share incentives is better because they actually have to work to increase the share price.

And the people below director level who have had a pay freeze or worse for about the last four years don't contribute to that at all?

Of course they do. Share incentive schemes are available of all employees, not just for directors.

You sure about that? For every one of the companies in question? Under the same terms?