« Free guide helps small businesses get bank borrowing | Main | UK needs a culture shift to build a global IT business »
Monday
Nov092009

Recession is making directors work harder for less pay

Directors are working longer hours for less pay due to the recession, according to a study by the Institute of Directors (IOD).

The study shows 44% of executive directors have not had a pay increase in 2009 compared with 26% in 2008, while 6% have had their income cut by 15% on average. About 50% of directors also put in 55 hours a week or more to keep their businesses afloat – while 14% are behind their desks for more than 60 hours a week.

The average director is working 40 hours in the office, 8 hours at home and 10 hours on business travel.

A full time UK employee works, on average, 37 hours per week.

The survey found that a managing director in a financial services company earns an average salary of £120,000, compared with their counterpart in the voluntary sector on £75,235. Public sector MDs came in second place with an average salary of £110,000.

IOD Director General Miles Templeman said: "With half of directors taking a pay cut or a pay freeze this year, we can see that the recession is affecting people at all levels of seniority in the private sector. From the shop floor to the boardroom, no one is immune from the pain.

"In order to keep their businesses going, we're seeing directors putting in much longer hours. This reflects both the severity of the recession and the commitment of directors to get their businesses and employees through it.

"It's important that the public sector now follows the example set by the private sector and shares some of the pain. If we want the public finances to recover, public sector workers must accept the need for pay freezes."

Non-executive directors were paid an average £15,000, according to the survey. 

About 28% of non-executive directors work without pay. Between 44% and 77% of non-executives had no pay increase in the past 12 months, and those who did had a pay increase of an average of 3% to 3.75%.

About 3,500 directors from 1,200 organisations were looked at for the results.

 



PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>