Boardroom blues as pay is slashed
UK business directors are likely to be downbeat in the wake of salary freezes, no bonuses and reduced salary, and the future does not look any brighter.
UK PLC has squeezed senior executive pay and benefits in response to the recession, contrary to recent reports, new figures from global management consultancy Hay Group reveal today. Hay Group's Executive Compensation Report 2009, the most comprehensive study of UK executive remuneration, is based on analysis of salaries and incentives paid to almost 12,000 senior executives at close to 500 organisations during the financial year 2008/9.
The report demonstrates the dampening impact recession has had on executive remuneration among Britain's largest listed firms. In the period May 2008 to May 2009, the median boardroom director's salary saw zero increase, while total cash paid - base salary plus annual bonus, saw a significant decrease of 10.1 percent. Close to a third (29 percent) received no bonus at all. This represents a significant turnaround from the previous fiscal year (2007/8), which saw total cash paid to executive directors increase by 10 percent.
Jon Dymond, Director at Hay Group, commented: "The last financial year has seen remuneration committees caught between militant shareholders, political pressures and media sensationalism, and on the other hand the need to retain top talent and motivate their most senior leaders to steer firms safely through the economic storm. "Caught between these conflicting pressures, public firms have taken account of harsh economic circumstances and acted to rein in executive remuneration." The senior management tier just below board level has also experienced a more restrained approach to executive pay. Below-board executives' median salary saw zero increase on last year, while median total cash, salary plus bonus, dropped by 0.6 percent in 2008/9.15th October 2009
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Created on: 15-Oct-09 17:07
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