Cost of living puts pay of UK directors on lower rung

BRITISH company directors are seeing their pay rise at the same rate as their counterparts in mainland Europe, but they remain near the bottom of the earnings league, according to a survey published today by Monks Partnership, the remuneration advisers.

The median base salary increase for directors in UK subsidiary companies was 6 per cent in the year to July 1993. Their Portuguese equivalents had the highest rise, at 13.8 per cent, and the Swiss the lowest, at 4.5 per cent.

However, once the figures are adjusted for inflation, the Portuguese increase slips to 5 per cent, the UK to 3.3 per cent and the Swiss to 2.7 per cent.

In gross pay terms, the standard British director ranks twelfth, with a salary of pounds 41,000. Once tax is deducted, the UK director - assuming he or she is married with two children - rises to tenth, with take-home pay of just under pounds 30,000. However, when the cost of living is taken into account, he or she slips back again, to eleventh - just ahead of Denmark, Finland and Sweden.

The report found that annual bonuses were almost universal in Western Europe, with their value closely linked to status. Share options also depended on status.

The study, Management Remuneration in Europe 1993-94, covered more than 1,000 companies, mostly European subsidiaries of multinationals and with annual turnover assumed to be the equivalent of pounds 20m in 16

countries.

Many differences distort the earnings picture - for instance, the varying levels of taxation, social security deductions and costs of living - while in the past year there have been large and sudden exchange-rate movements.

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