Pay falls as directors lose bonuses

MORE than a quarter of top executives saw their pay cut over the past year, usually through the loss of most or all of the previous year's bonus, according to a new study published yesterday.

Two per cent of the directors lost 30 per cent or more, while nearly a fifth saw their pay fall by up to 10 per cent.

The 1992 Board of Directors Study UK, published by the executive search consultancy Korn/Ferry International, also found that the spread of earnings for people doing comparable jobs in companies of about the same size had widened over the past year. Better-paid directors generally received larger increases.

Size is the dominant influence on pay levels, with type of business and other factors, such as overseas diversification, counting for little.

Overall pay increased by amounts above the inflation rate. The median increase was 8 to 10 per cent and directors handling particular functions seemed to receive bigger increases than chief executives and divisional directors.

Performance-related bonus schemes seemed to have played a crucial role in reducing earnings of some executives.