Bonuses for managers up in 2013

Bonuses paid to managers in the first months of 2013 comprised around 30% of salary, compared to 21% of salary during the corresponding period in 2012, according to research by Incomes Data Services (IDS).

However, its Executive compensation review found, however, that there is a divergence between the increases in bonuses at different managerial levels. Bonuses awarded in 2013 for middle and junior management were actually up to 1% lower than in the same period in 2012.

It also found that the biggest increases in bonuses were to board members. Board-level bonuses awarded in the three months to the end of April were 18 percentage points higher as a proportion of salary than last year at an average 38% of salary.

The research also found:

  • Overall average annual pay awards made during the three months to the end of April 2013 were 2%, while the retail prices index (RPI) stood at 3.3%.
  • Managers in the public sector suffered the most, with average public sector management pay awards made during the period of just 0.9%.
  • Managers and professional staff in the manufacturing sector saw the biggest improvements in pay, although these were still well behind inflation, with average pay awards of 2.3%.
  • 33.3% of board level reviews were pay freezes.
  • The average pay rise for a private sector board member was 1.7% during this period, compared to 2.1% for more junior professional and technical staff.

Adam Cohen, researcher at IDS and author of the report, said: “The research shows that in all sectors, professional and management level staff are really feeling the pinch as incomes fall behind inflation.

“The more buoyant economic prospects we have seen in the late spring may provide employers with room to be more relaxed about their pay bills over the coming months, but managers and professionals would have to receive some very high salary rises if they are to make up for lost ground.

“While wages for senior managers remain suppressed, these very modest pay rises were made during the busiest time of the year for pay reviews, so many managers will be waiting another year for their next pay review.

“As in previous years, salary rises for management have been subdued, but bonuses, which make up an important element of total pay for senior executives and board members have shown some increases.

“Among organisations enjoying improved trading conditions this year, we have witnessed some paying out significantly higher bonuses to top bosses. However, this has certainly not been the case across all organisations.”