30/11/2011

By Viv Copeland, Head of Reward at Croner

There has been much media coverage recently about the large increases in remuneration levels of the CEOs of the FTSE 100 companies. Studies reported 49% increases in total remuneration year on year making the average salary for a FTSE 100 CEO £3.8m. Whilst this is very interesting and worthy of comment, we must remember that the vast majority of British Boardrooms are in organisations much smaller than those in the FTSE 100, and the remuneration of their Managing Directors and Chief Executives is a far cry from that of their much larger corporate counterparts.

An annual survey, conducted by Croner Reward, covering pay and benefits for directors in organisations up to £500 million turnover shows the average managing director earns £99,445. 61% of Managing Directors in the smallest companies (up to £5m turnover) had a pay freeze in 2011 and over the past 5 years their pay has only risen by £5,000 to an average of £70,000. Of those who did have a pay rise last year, the average was 3%. Furthermore their average bonus over that period has dropped from £30,000 to £12,500.

Looking at the larger companies in this survey (£50m to £500m turnover), 25% of their directors had a pay freeze in 2011 and over the last 5 years the average pay for a managing director in this size of organisation has dropped from £141,000 to £130,000. Their average bonus has risen over the same period from an average of £46,000 to £54,000 in 2011, and 93% of them report that their pay review is based on performance. Directors in the larger companies continue to work between 56 and 60 hours a week.

Inflation is currently running at 5.2% and pay awards in the private sector are averaging 2.3%

For more information on pay and benefits visit www.cronersolutions.co.uk


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