HR & Management

Company director earnings have almost tripled since 2000

1 min read

13 October 2014

According to a new report from Incomes Data Services (IDS) UK company director earnings are up 278 per cent over the last 14 years.

This makes them 120 times larger than the average salary of their employees, compared to 27 times in 2000.

This increase amounts to an average of £2.43m a year; meanwhile, the average salary of a worker is £27,000.

Much of the rise can be accounted for by a 44 per cent increase in awards from held shares, sometimes used as incentives to retain staff. 

The best paid directors were in media and telecoms, and the worst in retail and manufacturing.

Actual salaries of directors were £822,300, on average – only a marginal increase of 2.5 per cent since 2000. Bonuses were up 12 per cent.

Steve Tatton, editor of the IDS report, said: “The pattern of pay growth highlights the complex make-up of directors’ remuneration.

“Salary rises may be modest but this can be more than made up for by the receipt of incentive payments. When such incentives pay out, they can pay out substantial sums, giving a significant boost to directors’ earnings.”