IoD/Croner Reward survey shows that the average UK boss is earning less than GPs
Gender pay gap at 17%, 31% of Non Executive Directors are working unpaid, Long hours culture is increasing
London – The Institute of Directors (IoD) annual Directors Rewards survey, carried out by Croner Reward, part of Wolters Kluwer UK, analysed 3,636 jobs from around 1,200 organisations. The results published today are based on evidence drawn from all sectors and size of organisation.
Commenting on the survey findings, Miles Templeman, Director General of the IoD said:
“The lifeblood of the UK economy are small to medium sized businesses. Our survey shows that basic pay for a managing director in a small company is £65,000. This is a world away from the ‘fat cat’ label that is often levelled at Britain’s bosses. The reality is that most managing directors actually earn less than the average GP.”
Miles Templeman added:
“It’s a measure of the drive and commitment of directors in this country that nearly a third of UK bosses work more than 55 hours a week. That means that many directors are doing 48% more work each week that the average full-time UK employee. As the downturn bites we can expect to see directors working even harder to keep their businesses afloat.
The survey also shows that 31% of Non Executive directors are working unpaid.
“Non-executive directors share the same legally-defined duties and potential liabilities as full-time directors. Their willingness to work in an unpaid capacity – particularly in smaller businesses - is a reflection of both personal commitment and the increasingly challenging economic climate in which companies are operating.”
Managing directors and other executive directors in small companies received an average pay rise of 3.5% and are forecasting 4.0% next year.
Basic pay for a managing director of a small company (up to £5M) is £65,000, and pay for other executive directors averages £59,885. In a large organisation with a turnover of between £50 million and £500 million, a managing director could expect to earn £150,000 and an executive director £92,000.
The survey found that directors in financial services are still the highest paid.
Hours of work and holidays
26% of directors in small companies are working over 55 hours a week with 42% working 46 to 55 hours. The long hour’s culture seems to have taken a stronger hold this year for directors in medium-sized companies. Here 30% of directors work over 55 hours (24% last year) and 52% work 46 to 55 hours (35% last year).
Furthermore, only 13% of directors in medium-sized companies are taking 30 days holiday compared with 21% last year. In large companies (£50 to £500M turnover) 32% of directors now work over 55 hours per week and 51% work 46 to 55 hours.
All these figures need to be seen in the context of work patterns across the labour force. The average weekly hours actually worked by a UK full time employee is 37 (UK Labour Force Survey).
Gender Pay Gap
The survey shows that the pay gap between male and female directors is now 17%, down from 22% in last year’s survey.
The biggest gaps are in the private sector, with a 22% gap between male and female director pay in manufacturing and a 24% gap in the private service sector.
The public sector response this year shows pay for female directors slightly ahead of their male counterparts.
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