FRANK CHAPMAN, the chief executive of BG Group, pocketed £10.9m in base salary, bonus and shares last year, making him one of the best paid bosses in the FTSE 100.

The bumper package, revealed in the company’s annual accounts, was awarded despite a 15% drop in BG’s share price last year. It comes as bosses across Britain face pressure to take pay freezes or reduce their bonuses while the country is hit by a wave of redundancies and spending cuts to deal with the recession.

BG, however, has performed fairly well. Chapman’s pay is more than three times the £2.8m collected by BP chief Tony Hayward, who froze boardroom pay this year, and edged out the €10.3m (£9.3m) awarded to Jeroen van der Veer, the outgoing boss of Royal Dutch Shell.

Chapman’s package includes £1m in base pay, a $1.9m cash bonus, a package of vested shares worth £7.3m, and a £678,000 pension top-up. The stock was awarded under a three-year scheme measuring shareholder returns, which ended in September. BG shares increased by 240%, aided by big profits at its liquefied natural gas business and several big finds, including off the coast of Brazil, over that period. Shares at BP and Shell, meanwhile, fell by 15% and 9%, respectively.

Chapman was also granted another 1.6m shares, worth £17m based on BG’s current value, that will vest over the next two-and-a-half years. Finance director Ashley Almanza, meanwhile, took home £5.4m in cash and shares.

A BG spokesman said the packages were commensurate with the company’s performance over the past year.

“The performance of BG in 2008 was very powerful, with earnings up 74% and operating profit up 65%. This success is reflected in management pay, most of which is tied to performance,” he said.

Executive pay has become a huge issue in the recession, which has laid bare the gap that widened in the boom years between the remuneration of bosses and the average worker. Jonathan Hutchings of Hewitt New Bridge Street, the executive-reward consultancy, said about two-thirds of large-company bosses will freeze salaries this year.

He expects remuneration committees to push through changes to peg a greater portion of pay to longer-term performance. “Things have been happening at such a dizzying speed that companies have been taking an Elastoplast approach to pay,” he said.

“But in the latter half of this year we will start to see remuneration strategies change substantially to come in line with the new economic paradigm and greater regulatory scrutiny.”

Meanwhile, the Old Mutual insurance group handed its former chief executive Jim Sutcliffe a payoff deal worth more than £1m after his resignation last year. According to details in the annual report, Sutcliffe will receive his £800,000-a-year salary and more than £270,000 a year in benefits until September.

Old Mutual’s annual report also reveals that the group’s new chief executive, Julian Roberts, could net up to £3.4m this year, thanks in part to a bonus scheme that could see him earn up to 150% of his salary. And Philip Broadley, the group’s new finance director, has been handed discounted share options worth £750,000 as a sign-on fee. Broadley could earn as much as £2.7m in 2009.

It was also revealed last week that Stephen Catlin, the chief executive of insurance group Catlin, received £1.6m last year, down from £4.3m in 2007.

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