Those non-executive directors of FTSE 100 companies whose pay increased in 2008 enjoyed an average pay rise of 15 per cent last year, according to a report, despite tumbling share prices, dividend cuts and profit warnings.

The average pay increase for FTSE 100 non-executives – including those whose pay was frozen – was 6.3 per cent, with the average wage rising to £57,056, according to figures published by Income Data Services (IDS), an independent research body.

The highest-paid non-executives were at Kazakhmys, the mining company, where fees averaged £120,000 in 2008, despite an 82 per cent fall in the share price. Non-executives of Vodafone earned £110,000, although its shares lost more than a quarter of their value last year. Non-executives at BT enjoyed the biggest increase in 2008 – their fees rose 50 per cent to £60,000 – while the shares plunged 50 per cent in the same period.

The latest IDS figures are published as debate rages about the need for better governance at banks and for strong non-executive directors. Last week, Paul Moore, the HBOS whistleblower and former head of risk at the bank, questioned the role played by non-executive directors before the current financial crisis.

“I strongly believe the real underlying cause of all the problems [we now face] was simply this – a total failure of all key aspects of governance . . . The single most important change is that there has to be a proper balance of power between the executive and the non-executive. The non-executives need to be much more independent than they currently are.”

Non-executive salaries at Lloyds TSB, which now owns HBOS, were £65,000 in 2008, while the share price fell 73.1 per cent during the year. The banking group announced a £10 billion writedown on Friday.

Many shareholders believe that they have to pay non-executives more if they want better governance, Steve Tatton, editor of the IDS report, said, but the string of management failures in recent months will lead many to ask what these pay increases achieved.

However, Thomas Kirchmaier, of the London School of Economics and Manchester Business School, said that governance had improved in the FTSE 100 in the past five to ten years, particularly among non-financial companies. But he said that the “boards of banks are different animals . . . Banks don’t hire people who seem to know what they’re doing.”

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