Directors' pay continues to freefall, says IoD
The majority of East Midlands directors have seen a drop in their pay packet. That’s according to the Institute of Directors (IoD) annual Directors Rewards survey, which said that 46 per cent of directors have had either a pay freeze or pay reduction this year.
The survey, carried out by Croner Reward, analysed the pay and bonuses of more than 1,500 directors.
According to the survey, the average pay rise for the 54 per cent who received one in 2010 was 2.5 per cent – which results in a cut in real terms once inflation is taken into account.
The average basic pay of a managing director in a small company (with a turnover up to £5m a year) was £70,000; in a medium sized company (turnover up to £50m a year) £100,000; and in a large company with a turnover of up to £500m a year was £128,000.
Twenty-three per cent of directors reported that their bonus was cancelled or postponed this year. Where bonuses were awarded to directors, the average bonus fell by nearly 20 per cent compared to last year. The average bonus for a director in a small company was £10,000; it was £12,600 in a medium company and £17,200 in a large company.
Ron Lynch, the IoD’s East Midlands regional director, said: “This survey kills the idea that company directors are beginning to enjoy big pay rises at the very moment a pay freeze takes effect in the public sector.
"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.”
