Half of directors have had their pay frozen or took a pay cut this year, according to research by The Institute of Directors (IOD).
The IOD’s annual Directors Rewards survey found that 44% of executive directors have had a pay freeze in 2009 with a further 6% taking a pay cut.
This picture varies by size of company. In small companies, 50% had a pay freeze and 9% a pay cut. In medium-sized companies, 42% had a pay freeze and 7% a pay cut.
In companies with a turnover of £50 million to £500 million, 36% of executive directors had a pay freeze and 4% took a pay cut. Of those who took a pay cut this was typically 15% of salary.
The overall average pay rise for the 50% of directors who received one was 3.2%.
Basic pay for a managing director of a small company now stands at £70,000.
Commenting on the survey findings, Miles Templeman, director general of the IOD said: “With half of directors taking a pay cut or a pay freeze this year, we can see that the recession is affecting people at all levels of seniority in the private sector. From the shop floor to the boardroom, no one is immune from the pain.
“In order to keep their businesses going, we’re seeing directors putting in much longer hours. This reflects both the severity of the recession and the commitment of directors to get their businesses and employees through it.”
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