Directors' pay up by five times inflation: Management institute chief urges restraint
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Your support makes all the difference.AT A time of increasing wage freezes and cuts, directors of large companies are enjoying rises of around five times the inflation rate, according to the Institute of Management's annual salary survey published today.
Aware of public disquiet on the issue, Roger Young, the institute's director-general, said: 'Greedy managers and directors should be prepared to swallow the same medicine as everyone else. It is in the best interests of the country.'
Board members at companies with a turnover of more than pounds 600m received increases of 8.6 per cent in the year to January compared with an inflation rate that fell to 1.7 per cent. Their colleagues in companies with sales of less than pounds 25m received 6.9 per cent - more than four times the increase in the retail price index in the 12 months to January.
On average, directors' earnings rose by 5.5 per cent with the lowest increase of 4.7 per cent going to those at organisations with a turnover of between pounds 125m and pounds 600m.
The survey, jointly published with the research group Remuneration Economics, found that managers' salary increases continued to lag behind those of directors. Overall, managers' pay increased by 4.5 per cent, which was lower than other non-manual workers who received 5.4 per cent over the same period.
Women tended to receive higher rises than their male colleagues, but still earned substantially less.
The study of more than 25,000 individuals employed by nearly 400 companies points out that increases in managers' earnings fell from 7 per cent to 4.5 per cent last year. Rises in directors' pay, however, rose from 3.9 per cent to 5.5 per cent.
About 40 per cent of managers now earn more than pounds 30,000 and 68.8 per cent of directors receive more than pounds 50,000. The average manager earns pounds 29,838, and the average director pounds 68,722.
Incomes Data Services research published today reports an increasing number of pay pauses and freezes.
The latest IDS report shows that about three-quarters of wage settlements in 1993 so far have been worth between 2 per cent and 4.9 per cent. The largest number of increases were worth between 3 per cent and 3.9 per cent at a time when the inflation rate was about 3 per cent.
The first sign of an upturn in managerial and executive recruitment for more than four years is shown by the latest MSL Index quarterly figures.
British Airways has offered 6,000 ground staff at Heathrow a lump sum worth six months' pay if they agree to move to part-time work. The airline has offered to protect the pension rights of anyone over 50 who accepts the deal.
National Management Salary Survey, published by the Institute of Management, available from Remuneration Economics, Survey House, 51 Portland Road, Kingston upon Thames, Surrey KT1 2SH.
IDS Report 639, available from Incomes Data Services, 193 St John Street, London EC1V 4LS.
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