The pay rises mean that taking bonuses and other incentives into account, the average basic salary of an AIM CEO has broken through the £200,000 barrier for the first time ever to reach £203,191. Wowza.
Of course it makes sense that CEOs and directors of well-performing companies are compensated for their efforts – especially if these SMEs really are going to be the answer to the UK’s economic woes (no pressure, then). But when you consider that the average pay rise amongst workers in the UK in the last year was 1.6% (and that’s for those who managed to hang on to their jobs), it’s bound to leave a bitter taste in the mouth for some.
It wasn’t all good news for AIM CEO’s pay packets. According to the IDS data, in the same period bonus payments for directors fell 7% from £53,341 to £49,590. While that may not have left them best pleased, they’re hardly on the breadline.
Steve Tatton, editor of the report, suggested that companies were making up for lower bonuses with higher salaries and other perks. ‘Shareholders could feel directors will not be properly incentivised to perform if what they lose at the swings is made up for them at the roundabout by the remuneration committee,’ he said.
He also warned that given the current economic climate that swapping bonuses for higher salaries ‘may seem to be an endorsement of the pay-for-performance culture that has dominated boardroom compensation strategy for more than two decades’. There has been mounting resentment over boardroom pay, driven mainly by public anger about the size of whopping great bonuses awarded in the financial services sector, so we while can see the logic of the strategy, it’s unlikely to go down very well with the Great British public.
So much for the mantra that everyone needs to tighten their belts during the recession…
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