Non-executive directors’ pay rises 7%

Pay rise-2015

Non-executive directors in the UK’s largest organisations have seen a move towards annual pay increases of 7% in 2014, according to research by PricewaterhouseCoopers (PWC) annual non-executive director report.

Its annual Non-executive director fees report found that non-executive directors saw a rise in base pay to £65,000 in 2014, up from £61,000 in 2013.

Meanwhile, FTSE 100 chairmen saw a 3% increase in their fees in 2014 to £373,000, up from 361,000 in 2013.

This follows a plateauing of salary in 2013 after five years of increases for both chairman and non-executives, where pay increases hit highs of more than 15% in 2008 and 11% in 2009.

Fiona Camenzuli, partner in the pay, performance and risk team at PWC, said: “Despite many non-executives seeing a return to fee increases in 2014, I believe the days of substantial fee increases every couple of years are over.

“A large number of the UK’s largest employers now have an annual review cycle for non-executive fees and are moving towards awarding increases that are more in line with any given to executives and wider employees. We therefore expect a period of more gradual increases to non-executive directors’ fees in general.

“However, many organisations are not there yet, with rises to non-executive fees still higher than the general population due to the increasing demands of the role.

“In our experience, non-executive director roles are becoming increasingly challenging, time-consuming and carry a greater reputational risk and some companies will need to make step changes to fees to reflect this if they have not done so in recent years.

“Finding the right people, with the right background and skills to navigate the increasingly complex environment can be tough and a premium will often have to be paid.

“It will be a balancing act for employers to reward non-executives for their increase responsibilities and the complexity of the role as the pace of regulatory change continues, while at the same time recognising pay increases for employees and executives.