Non-executive directors see pay rise by 13%

Non-executive directors have seen their pay increase twice as fast as other executives in the past year, according to research by KPMG.

The average non-executive director of an FTSE 100 company (excluding chairmen) now earns £48,000, an increase of 13% on last year.

This is almost double the 7% rise in salary that executive directors received on average in 2004.

KPMG said the pay rises reflected the increased “responsibility and risk” that non-execs faced.

Carl Sjostrom, a partner at KPMG, told the Financial Times that rising pay for non-executives reflected a recognition that those responsible for audit and remuneration committees had a growing workload.

“The task of the committee members has become very different. There’s a much greater risk to the individual,” he said.

This stemmed from attention arising from the US’ Sarbannes-Oxley corporate governance legislation and recent scandals over executive pay that added a heightened risk to non-execs’ reputations, KPMG said.

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