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Educational publisher Pearson, which made a £2.5bn loss in 2016, has awarded its chief executive John Fallon a 20 per cent pay rise for the year.

Mr Fallon received total remuneration of £1.5m, up from £1.26m in 2015. Although his base salary was broadly flat at £780,000 – compared £776,000 in 2015 – his total pay out was boosted by an annual incentive award of £343,000. In 2015 Mr Fallon received no incentive payment.

Pearson, which sold Financial Times to Nikkei in 2015 for £844m, has issued 5 profits warnings and seen its shares halve since 2012, when Mr Fallon was appointed chief executive.

In the annual report which was published on Friday, the company said there was a there was a general pay freeze for all senior management “including executive directors” in 2016.

In his statement to shareholders in the annual report, Mr Fallon said “2016 was a tough year for Pearson”.

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