Half of company directors have had their pay cut or frozen

Almost half of executive directors have had their pay frozen in 2009 while 6% have taken a pay cut, said the Institute of Directors (IoD).

It added that the picture varied from company to company, with 50% of directors of small companies experiencing a pay freeze compared to 42% of directors of medium-sized companies, and 36% of those at large companies. Nine per cent of small company directors have taken a pay cut this year, while 7% of those at medium-sized companies and 4% of those at large ones have done so.

IoD director general Miles Templeman said: “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 are 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.”

The IoD’s figures, based on research, indicated that 46% of directors of medium-sized companies are working more than 55 hours a week compared to 30% last year, and of that percentage 18% are putting in more than 60 hours a week. Last year, only 7% did so.

Some 40% of directors of small companies will work more than 55 hours a week this year, while 50% of directors of large ones are expected to do so, said the IoD. Of the latter, 25% will work more than 60 hours a week in 2009, compared to 11% in 2008.

For the 50% of directors surveyed who got a pay rise this year, the average was 3.2%. And, said the IoD, the basic pay for a managing director at a small company is £70,000, while that of an MD of a financial services company is £120,000, compared to £75,235 for an MD in the voluntary sector.

Public sector MDs earn an average salary of £110,000.

The IoD defines small, medium and large companies as ones that turn over up to £5m, £5m to £50m, and £50m to £500m respectively.

The figures are based on an IoD analysis of 3,468 jobs, undertaken on its behalf.

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