UK plcs have squeezed senior executive pay and benefits in response to the recession, according to new figures from global management consultancy Hay Group.
Hay Group’s Executive Compensation Report 2009 is based on analysis of salaries and incentives paid to almost 12,000 senior executives at close to 500 organisations during the financial year 2008/9.
Boardroom pay
In the period May 2008 to May 2009, the median boardroom director’s salary saw zero increase, while total cash paid – base salary plus annual bonus – saw a significant decrease of 10.1%. Close to a third (29%) received no bonus at all.
This represents a significant turnaround from the previous fiscal year (2007/8), which saw total cash paid to executive directors increase by 10%.
Jon Dymond, director at Hay Group, said: “The last financial year has seen remuneration committees caught between militant shareholders, political pressures and media sensationalism, and on the other hand the need to retain top talent and motivate their most senior leaders to steer firms safely through the economic storm.
“Caught between these conflicting pressures, public firms have taken account of harsh economic circumstances and acted to rein in executive remuneration.”
Below the board
The senior management tier just below board level has also experienced a more restrained approach to executive pay.
Below-board executives’ median salary saw zero increase on last year, while median total cash – salary plus bonus – dropped by 0.6% in 2008/9.
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