THE MT GLOBAL SALARY SURVEY - WHAT ARE YOU WORTH? Your income tells you a lot about how you are valued in the UK market, but where does it place you in the worldwide pay picture? Matthew Gwyther and Andrew Saunders look at who gets what for working where.
Hands up if you think you are paid what you're worth. Let's not be typically British - always whingeing about being overworked, undervalued and under the cosh. A bit of realism, please. You don't want high inflation again, all that boom and bust. And so runs the argument.
Well, what are you worth? To assess the true value of what people do, Management Today has conducted a global salary survey that brings some objectivity to that tricky question. Would you be better off somewhere else? We have also tried to show whether the grass really is greener on the other side of the Channel or the Atlantic. Some findings were unsurprising: for example, that it pays to be the boss. Others were startling, including two that seem to bear out the increasingly familiar complaint that 'it's not about people anymore; they've turned it all over to the accountants'.
Yes, we value accountants more highly than any other developed nation on the planet, including the Americans, and by a considerable margin. The UK accountant with five years of experience even outstrips his German and US counterparts. The figures are equally telling for finance directors. At this level, the Americans have caught up, but the Brits are still well ahead of the rest.
We have traditionally valued the individual who counts the beans over the one who designs, manufactures or even markets them. And it is the bean-counter who shows the boss that it often adds up to size down. Which brings us to the second shocker.
While we plod through the rain and endure poor public transport to reach jobs where we work longer hours than anyone else, only then to be ripped off for an overpriced car or a pair of Levis that costs twice the New York price, what are we given in return? The cheapest bullet in the world, between the eyes, when we become surplus to requirements. It now costs less to fire someone in the UK than it does even in that voracious user and discarder of human resources, the US economy.
According to our tables, if you are British and the boss, then things are going rather well. Our CEOs are right up there, beating all other European countries by an average of several hundred thousands of dollars.
(The bigger your company, the better it gets. Senior directors at the top 350 companies in the UK received a pay increase of 17.8% in the last financial year.) We are, naturally, completely outdone by the fat-cat Americans who, with their share options and a booming Dow Jones Index, are away into the stratosphere.
If you want to be the boss, be an American, but be wary of the workload.
Half of America's managers find it 'difficult to balance work and personal responsibilities'.
But before the non-accountants reading this start reaching for their guns, spare a thought for those sad Swedes. Their CEOs, accountants, manufacturing employees, marketing and IT personnel come either at, or near, the bottom of almost every MT remuneration list. A characteristically lugubrious spokesman for the Swedish Trade Council in London remarked, 'This doesn't surprise me at all. Salaries are far more evenly spread in Sweden, although there's now discussion about the need to pay qualified people more to stop them going abroad. But I think there's a taboo about money, in the same way as you get very bothered about sexual scandal.
Our tabloids are far more likely to make a fuss about the head of the Swedish Post Office being paid far too much.' A similar attitude has prevailed in Japan. In Japan a CEO's annual income is, on average, only about 10 times that of an entry-level employee. For many years the Japanese have held to the belief that employees should share corporate profits equally in the interest of group harmony.
This, along with much else in Japan, is currently undergoing a rethink and about 150 out of 3,000 listed companies are now introducing share options. It will no longer be the case that there is no penalty for poor performance just as there is no compensation for good performance.
By this token, certain performances in the US seem to have reached superhuman levels in recent years. Cats don't get much fatter than the one who runs the mouse factory, Michael Eisner, the chairman and CEO of Disney. He caused uproar among shareholders two years ago when it became clear that he had earned £9 million per annum and had a 10-year contract which, if he left against his will, would allow him to collect at least £120 million in share options - when he already had share options that were worth £225 million. Can any one individual be worth those sums?
So what chance is there of British executives getting in on some of the lucrative American action. It will be remembered that a couple of years ago, when we were all exercised by the astronomical packages being awarded to the chiefs of the privatised utilities, a new excuse was brought forward for the first time: the fevered nature of the global market for senior executives.
This argument really got Peter Oppenheimer, economist and fellow of Christ College, Oxford, fuming: 'This global senior executives marketplace argument is an absolute nonsense.You don't need to look around for very long to see why. Where are these people? Even inside Europe the recruitment of senior executives across borders is still almost unheard of. Generally these people seem to find it difficult enough to jump from one company's corporate culture to another, let alone from one national culture to another.' The world, however, is shrinking and there is evidence of a small but growing internationalisation in this market. Surprisingly, for a nation renowned for its island status and apparent suspicion of things foreign, the UK is in the vanguard of this trend. John Viney, chairman of headhunters Heidrick & Struggles, thinks that Oppenheimer's opinions are nowadays a 'little passe'. (Viney's operation has 53 offices worldwide to keep busy, so his keen border-banishing is, perhaps, not altogether surprising.)
'In recent years we've plundered the world - like the Brits have always done - to find good people at senior management level,' he says. 'We've now got a Chinese in charge at GKN, an Indian at Standard Chartered, Swedes at Bowaters and CGU. The UK has been a cauldron of activity in this area and I'll soon have a Dutchman at the head of another major UK plc, if all goes well.'
But does the same apply for France, Germany and Japan? Imagine the sensation if Sony suddenly announced that a Finn was taking over the helm. 'I know,' concedes Viney. 'But give it 10 years. The analogy I always think of is the football one - look how few of the players competing in last year's World Cup actually lived and worked in the countries they were representing.'
Viney does acknowledge, however, that whenever the global CEO marketplace in salaries is talked about, 'people are only ever talking about the rates paid in the US. The stock options side to American packages has been very valuable, especially in recent years. The effect of this is that nobody outside the States will ever get the best Americans because they simply cannot afford them.' Lower down the feeding chain, however, we encounter a different story. Berlin is currently being rebuilt by a Gastarbeiter rainbow alliance of brickies, carpenters and plumbers. It's not difficult to say 'Auf Wiedersehen, Pet' when £800 a week beckons. But it isn't just skilled labourers who now cross borders.
Time was when computer people were kept, like the undead, in the basement of companies. They were worthless nerds with terrible dress sense, who could never fix anything when it went wrong, just grin. Suddenly IT folk are the most loved individuals on the planet, but not it seems in the UK where they lag behind our European competitors. At a recent Microsoft training session for programmers in Holland there were security staff present to fight off the headhunters eager to fall on their prey. Last year, in the IT division at Robert Walters, the international recruitment consultants, they found that IT salary inflation was running at 8% per quarter. They have 26 year old skateboarders on their books who will not get out of bed for less than £100,000 a year because there simply are not enough trained staff to go round. But money is not, as any mellow skateboarder will tell you, the only way that a society shows it values various workers. There is still such a thing as job satisfaction - about which our tables tell you nothing.
It's interesting, however, that when the prime minister, during the heat of the debate about nurses' salaries, mentioned that there were rewards other than cash to be had in the profession of caring for others, he was greeted with howls of derision. 'Never mind the 'angels of mercy' bit, just show us the colour of your money, Tony,' was the universal response.
If we have become a nation run by accountants, maybe no one should be surprised that the wider population has adopted the accountants' values.
THE GLOBAL MARKET PLACE
Accountants in the UK pull more pay than counterparts abroad, while top bosses can do better by heading companies in America. How do you stand?
Should you be looking for a job in another country?
THE PACKAGE (pounds pa)
ACCOUNTANT (QUALIFIED, 5 YEARS' EXPERIENCE)
WHAT THE TAXMAN TAKES - MAXIMUM INCOME TAX RATE
Japan (Tokyo) 65% (inc 15% local tax)
Germany (Frankfurt) 56%
Sweden (Stockholm) 55% (inc 30% local tax)
France (Paris) 54%
US (New York) 50.91% (inc 11.31% local tax)
Australia (Sydney) 47%
UK (London) 40%
THE SALARY LADDER
HIGH TECH (annual package pounds )
Graduate Manager Dept head
Germany 38,447 68,873 117,410
Japan 33,935 64,724 -
US 26,335 48,101 82,271
France 25,143 47,028 71,967
Sweden 22,310 32,982 -
UK 22,287 37,418 67,765
Australia 17,813 29,106 48,230
Graduate Manager Dept head
Germany 35,456 68,197 121,050
Japan 32,255 62,863 -
UK 26,842 36,374 63,739
US 25,045 46,701 77,432
France 24,516 45,632 70,514
Sweden 22,202 38,107 65,349
Australia 16,242 27,918 48,236
MORE THAN MONEY
Cash doesn't equal quality of life. Sweden gives the best maternity
break, but the Germans are in the lead in providing paid holiday
Hourly work week Annual days off
UK 43.9 20.8
Germany 40 30
Sweden 40 25.1
France 39.8 25.3
Australia 39.8 20
Japan 39.6 20
US 39.5 11.4
PAID MATERNITY LEAVE (WEEKS)
ARE WE HAPPY IN THE UK?
Level of autonomy 32%/67%
Job security 11%/35%
Reward and remuneration 8%/34%
Relationship with peers 76%/72%
Recognition for performance 4%/37%
Typical severance pay for manufacturing employee
(% fixed salary)
FAMILY SAVINGS (% DISPOSABLE INCOME)
Japan 14.5 13.0
France 13.5 11.0
Germany 12.0 12.5
UK 11.0 6.5
US 4.5 5.5
Australia 3.0 5.0
Sweden 1.0 -5.0
Litres of pure alcohol per adult, per year
HOW THEY SPEND IT
Max and Bonny Frisch, both 36, live in New York on the Upper East Side.
Both are in publishing, and between them they are earning £110,00 a year, including those handy share dividends. School fees of nearly £8,000 per year are looming for Otto, their four-year-old. 'Bang goes his inheritance,' laughs Max, although he has done rather well of late dabbling in shares over the net. New York City might not be ideal for a four-year-old but they cannot face commuting from Connecticut. 'You don't go out there to live,' says Bonny. 'You go there to die.'
They can't/don't cook, and one drawer of the kitchen is devoted to take-away menus.
(In the US last year, more food was sold in food-service establishments than was bought through supermarkets. It is now common, if the doorbell goes after 6pm, for Manhattan children, in a Pavlovian reaction, to shout, 'Food!')
The couple visited old friends in London last year and were staggered at the cost of living. Max's last laugh before he got on the plane was hearing how much his old pal Charles had recently paid for his Chrysler Grand Cherokee Jeep. He chuckled all the way through the departure lounge.
Lucy Richards is 24, single and works in public relations in Manchester.
She shares a rented house in Didsbury with three friends and knows she is never going to be able to afford to get on the property ladder unless she gets seriously hitched or resigns herself to Levenshulme. At the moment she is not feeling terribly well-off on her £18,500 a year. Her Barclaycard limit was exceeded several months ago, a skiing holiday cost an arm and a leg, her last three precious trips to Old Trafford hurt more than a bit, there's a student loan to pay off and her six-year-old Ford Escort and its slipping clutch may be headed for the chop. Last week, Lucy worked out how much she spends annually on booze and ready-made dishes from M&S, Waitrose and Tesco.
She nearly had kittens.
JAPAN Ichiro and Kuniko Sato, 37 and 31, respectively, live in a three-bedroom apartment at Saitana, a two-hour commute from Tokyo, with their two children Hiroko and Makoto. Ichiro is a middle-manager in an insurance company on an annual salary of £37,000, including bonuses, and Kuniko is no longer in paid employment. Their home is very modestly decked out and their car is a cheap old-style Toyota Carina. In common with most Japanese families, large swathes of their spare cash go on their children - everything from expensive clothing to the after-school juku, or private tuition.
With a very downbeat economic atmosphere, Ichiro is working even longer hours but feels lucky his job appears fairly secure. The twice-yearly bonuses, however, on which he used to rely, have been looking anaemic recently. He has cut his spending back, which is contracting the economy still further. He hasn't even replaced his Nikon which has gone on the blink. The hugely generous Japanese gift-giving cycle is really starting to irk them, and they currently dread wedding invitations.
Metta, 36, and Anders Lindquist, 42, live in Landskrona outside Malmo. He works for a company that makes train brakes and she is studying computers. They have two children, Max, 8, and Tim, 3. They are aware that they are unlikely to get rich by staying in Sweden. In spite of Anders' relatively senior position, he earns a mere £22,000 per annum and loses 40% of that in income tax.
But Sweden does have its compensations - Metta's course is funded by the government which, in addition, pays her £200 per month for being in education. (There is a Chinese woman on the course who had to give up her learning in the US because it proved too expensive.) Their eight-room house only cost £50,000. The family has a total of eight bikes which keeps their petrol bill down. They visit friends in the UK every year and Metta is concerned about how expensive everything has become there.
THE BRITISH PICTURE
If you want to get on, get into the City - the old saying is just as true today. And it still pays to be a man. As a matter of geography, if you can't stick London, try Scotland.
UK REGIONAL VARIATIONS
Manager's earnings Director's earnings
(pounds ) (pounds )
Inner London 46,449 145,197
Scotland 40,386 130,372
Outer London 38,348 103,074
South East 35,398 84,112
Yorkshire 34,304 89,043
East Midlands 34,241 93,090
South West & Wales 34,043 83,211
North 33,071 78,980
North West 32,970 65,037
East Anglia 32,913 81,166
West Midlands 31,845 117,075
Average 36,196 93,787
Average age Average salary
Male manager 43 37,235
Female manager 37 31,622
Male director 48 94,742
Female director 41 66,711
Average hourly full-time earnings
All Ethnic minorities: 92% of pay for Whites
Pakistani/Bangladeshi males: 68% of pay for Whites
Chinese workers 22%
White workers 12%
Black workers 7%
IN THE CITY
Average salary Annual bonus
Head of fund management 161,676 187,544
Head of derivative trading 149,150 240,132
Head of capital markets 145,540 95,183
Corporate finance director 123,875 103,931
Head of structured finance 114,333 305,726
Senior swaps trader 98,340 119,188