IDS research: Aim directors’ pay breaks £200,000 barrier

Directors of Aim-listed organisations received pay rises averaging 6.1% in the last financial year, and have reached an average of £168,8601.

The Executive Compensation Review 354 by Incomes Data Services (IDS), shows the average basic salary of Aim chief executive officers (CEO) has broken through the £200,000 per annum ceiling for the first time to reach £203,191, which with the addition of bonuses and other incentives was boosted to total earnings of £288,917.

According to IDS’ data, the increase in base pay for Aim directors has more than made up for a 7% decline in bonus payments that AIM directors suffered over the last year.

Average bonus payments for Aim directors fell from £53,341 in 2009 to £49,590, although the decrease in bonus payments may be due to those Aim companies’ failure to hit the necessary performance targets such as earnings per share or overall profits.

Steve Tatton, the editor of the report, said: “It seems tough economic conditions, lower profits and low wage inflation among the broader workforce has not stopped Aim CEOs’ pay reaching this milestone.

“Given the recessionary times, lower bonuses may seem to be an endorsement of the pay-for-performance culture that has dominated boardroom compensation strategy for more than two decades, but given the depth of the downturn it is not evident if the equation holds that any payments at all should be awarded under current circumstances.

“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.

“With shareholders looking over their shoulders, smaller company remuneration committees need to ensure they draw the right balance between all the various components that go to make up boardroom remuneration.”

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