A recent Croner survey looked at the levels of pay for directors in various size segments of businesses.
It reveals that many directors of smaller and medium businesses are often no better off or are even worse off than in previous years. The average director’s pay in 2011 was:
– £82k in businesses with turnover up to £5 million: 15% less than 2010 (and 6% down since 2007)
– £129k in businesses in the next band up to £50 million: 3% more than 2010
– £174k in the £50 million to £500 million band: 2% more than 2010
Other findings are that:
– 27% of executive directors had a pay freeze in 2011
– A further 7% took a pay cut
– The largest impact has been on bosses of small companies: two and a half times as many as those in large companies (61%) have seen their pay frozen.
– Executive directors in the south east can earn about 7% more than their counterparts in the West Midlands (£80,000 compared with £75,030)
The survey also asked about working hours:
– 36% of directors are working over 50 hours a week
– 26% of them are working over 55 hours
– 41% of directors are entitled to 30 days’ holiday a year but only 11% actually take 30 days
All this is in sharp contrast to the stories about FTSE 100 directors with their 49% increases, and shows just how big a wedge is being driven between the wealthiest and the majority.
Note that the directors surveyed are not necessarily owners of the business. It is important that director/shareholders distinguish between their pay for the work that they do and their profit share as a shareholder – especially for SMEs.
For details of the source of the report, see the Croner website.
How have your pay and profits changed in the last year?