Almost half directors had pay frozen or cut, say IoD

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image captionManaging directors of the largest private companies took home £128,000 on average last year

Almost half of UK company directors had their pay frozen or cut last year, according to the Institute of Directors (IoD).

For the 54% whose pay rose in 2010, the average increase of 2.5% was below inflation, the IoD said.

It surveyed 1,500 companies that are not listed on the stock market, including small and medium size enterprises.

It does not include the rewards paid to some directors of public companies.

A recent survey by Incomes Data Services showed that FTSE 100 directors got an average pay increase of 55% over the past year, while the average increase in the FTSE 350 was 45%.

The survey sparked criticism of executive pay, with unemployment at just under 2.5m and the average wage rising by a below-inflation 1.7% in the year to August 2010.

Lower returns

The IoD figures suggest that, outside the big corporates, many business people are not receiving huge returns.

The average basic pay of a managing director in a company with turnover of up to £5m a year was £70,000.

In a large company which made up to £500m annually, it was £128,000.

Directors of these companies also have smaller bonuses on average than the headline-grabbing FTSE 100 firms.

Almost a quarter - 23% - of directors had their bonus cancelled or postponed this year, and when they received them, bonuses were down by nearly 10%.

Miles Templeman, director-general of the Institute of Directors, said: "For the second consecutive year, most directors are seeing their basic pay and bonuses go down. Clearly the impact of the recession on director remuneration is still being felt.

"When politicians and other individuals attack the private sector for excessive pay they ignore the fact that the majority of private sector directors earn about the same as a school headteacher or an ordinary NHS GP."

Almost half of UK company directors had their pay frozen or cut last year, according to the Institute of Directors (IoD).

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