CEOs of firms listed on the Alternative Investment Market (Aim) were awarded salary increases averaging 10.8% in the last financial year boosting their average basic salaries to £198,706, according to research by Incomes Data Services (IDS).
The Executive Compensation Review annual survey: ‘Directors’ Pay in Smaller Companies: Aim, Fledgling & SmallCaps 2009’ said this figure is three times the growth rate of pay across the UK over the same period which was 3.6% in 2008.
The salaries for all other directors of Aim companies increased by 10.2% on average but the salary increases for finance directors lagged slightly at 8.2% over the period.
Steve Tatton of IDS said: “The credit crunch and the economic downturn has been difficult for shareholders of Aim companies so double digit growth in Aim CEO salaries may come as a surprise to them. At a time when shareholders are getting such a poor return from their investments they do look for remuneration committees to exercise restraint.”
“However, Aim companies might argue that shareholders deserve the best management that they can afford which means they have to offer competitive salaries in order to attract and retain the best talent available.”
Bonuses for Aim CEOs fell as more companies missed their targets for overall profitability or earnings per share that these bonus schemes pay out on. The median bonus for Aim CEOs has fallen from £30,500 to £13,500.
However, the median total earnings (basic salary plus incentives) rose from £190,500 to £200,039. IDS said it seems that as if incentives went down and salaries went up.