· 44% of executive directors have
had a pay freeze in 2009 with a further
6% taking a pay cut
· Public sector MDs earning on
average £110, 000
· Only 1% of small companies offer a
final salary type pension scheme
· Up to half of directors are
working in excess of 55 hours a week.
The Institute of Directors (IoD) annual Directors Rewards
survey, carried out by Croner Reward, part of Wolters Kluwer UK,
analysed 3,468 jobs from around 1,200 organisations.
The results published today are based on evidence drawn from all
sectors and size of organisation.
"With half of directors taking a pay cut or a pay freeze this
year, we can see that the recession is affecting people at all
levels of seniority in the private sector. From the shop floor to
the boardroom, no one is immune from the pain," said Tony Maoine,
chairman of the Lincolnshire Branch of the Institute of
Directors.
"In order to keep their businesses going, we're seeing directors
putting in much longer hours. This reflects both the severity of
the recession and the commitment of directors to get their
businesses and employees through it.
"It's important that the public sector now follows the example
set by the private sector and shares some of the pain. If we want
the public finances to recover, public sector workers must accept
the need for pay freezes."
Pay
44% of executive directors have had a pay freeze in 2009 with a
further 6% taking a pay cut. This picture varies by size of
company, in small companies, 50% had a pay freeze and 9% a pay cut.
In medium sized companies, 42% had a pay freeze and 7% a pay
cut. In companies with a turnover of £50M to
£500M, 36% of executive directors had a pay freeze and 4%
took a pay cut. Of those who took a pay cut this was typically 15%
of salary.
The overall average pay rise for the 50% of directors who
received one was 3.2%.
Basic pay for a managing director of a small company now stands
at £70,000.
The survey found that a managing director in a financial
services company earns an average salary of £120,000,
compared with their counterpart in the voluntary sector on
£75,235. Public sector MDs came in second place with an
average salary of £110,000.
Hours of work
Working longer hours seems to have increased significantly this
year for directors in medium-sized companies. Here, 46% of
directors work over 55 hours (30% last year), of which 18% are
working over 60 hours (7% last year).
40% of directors in small companies are working over 55 hours a
week (up from 26% last year), of which 14% are working over 60
hours (11% last year).
In large companies, 50% of directors now work over 55 hours per
week (32% last year) of which 25% work over 60 hours (10% last
year).
The average director is working 40 hours in the office, 8 hours
at home and 10 hours on business travel.
A full time UK employee works, on average, 37 hours per
week.
Non Executive Directors
The average fee paid to a non-executive director in this survey
is £15,000.
On average, 28% of non-executive directors work unpaid.
Between 44% and 77% of non-executives had no pay increase
last year and those who did receive a pay increase had an average
of 3 to 3.75%.
"The role of the non-executive director is becoming
increasingly challenging. Non-execs make a vital contribution to
the culture of boardroom decision-making. However, in many cases,
the financial rewards of such a role are modest. This reflects
positively on the commitment and service orientation of
non-executive directors," said Tony Maoine.