Directors' pay rises at triple rate of inflation
Monday 24 October 1994
In the past 12 months, the average pay increase for directors was 6.1 per cent, with the figure for all executives 5 per cent.
The figures also show a small upturn during the year - from an average of 4.7 per cent in the six months to the end of March, to 5.1 per cent in the period to the end of last month.
However, there were significant variations according to the type of director and the geographical region. The lowest rises went to executives in operational functions, who received an average increase of 4 per cent, down from 4.9 per cent last year. The biggest awards were given to corporate executives, who received 6.2 per cent, up from 5.5 per cent last year.
The best regions to be in were the Midlands and the North, where executives received average rises of 5.2 per cent, while Wales and the South-west were the worst: executives based there received just 2.7 per cent.
There is some evidence that salary increases have been declining in the last three months, even though they are up on the year.
Andy Christie, remuneration consulting director at Sedgwick Noble Lowndes, attributed this to the absence of universal confidence in economic recovery.
'For the first time in nearly five years, we are seeing a fluctuation in the market where in one quarter the salaries are marginally up and in the next they are dipping down again,' he said.
'Essentially, many parts of British industry are not yet convinced we are out of recession. There is a general confusion about what is the appropriate level of pay and it has become very difficult to predict which way salaries are going.'
The report, based on a database that draws statistics from executives in 350 companies, shows that the number of performance-related bonuses increased in the year to the end of September, as the improving economic climate was reflected in more corporate targets being reached. Nearly 43 per cent of executives received such a bonus.
Within the benefits package, private medical insurance continued to be provided to 90 per cent of executives. But private dental care and critical illness insurance was restricted to the most senior, with only 6 per cent receiving it.
Growing concern about the stress on managers is reported to be behind the increasing use of medical screening - it is now offered by 70 per cent of companies, compared with 60 per cent a year ago - and the rising proportion of employers offering corporate membership of sports and health clubs. At 36 per cent, this was 40 per cent up on the level in 1990.
While 43 per cent of companies provide a cash alternative to the company car, the take- up rate is very low, with 58 per cent of companies reporting a rate of less than 1 per cent at senior levels.
More than 40 per cent of companies surveyed provided maternity benefits above the statutory minimum, with a third giving male executives some form of paternity leave - usually two to three days.
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