BusinessCompany News2003 FD salary survey – Rising stock

2003 FD salary survey - Rising stock

The salaries of financial directors have increased by an average of 13%, proving just how much their contribution to the UK industry is valued. The results of a recent survey by our sister publication Financial Director gives a comprehensive picture of who earns what.

Key charts:

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Despite a tough economy and thanks to some big relocation and other benefit packages, a sharp increase in benefits has taken FTSE100 FDs’ average total pay up by 13% to more than £682,000.

The increase is revealed by the Financial Director salary survey to cover the FTSE350. Research for Accountancy Age’s sister magazine shows that basic salary is up just 4% compared with last year’s survey.

At £392,000, the total package for a FTSE250 FD isn’t much more than the basic salary for a FTSE100 FD. A FTSE250 FD is likely to be earning in the £200K-400K bracket, while most FTSE100 FDs are in the £400K-700K range.

Top of the list again this year is Man Group FD Peter Clarke, who took home more than £2m in salary and bonus. Our table lists seven FTSE100 FDs, who have earned more than £1m a year. It excludes another two, Schroders’ new FD Jonathan Asquith and BP’s recent arrival Byron Grote, who also earned seven figures – but for less than a full-year’s employment. Two FDs from the FTSE250 also top the £1m bracket.

The research also reveals that Alison Reed is the best-paid female finance director in her post at Marks & Spencer, with a total pay packet of £695,000.

However, that remains almost £300,000 short of putting her among the top 10 FTSE100 players.

Another woman, Helen Weir, FD at Kingfisher, saw the biggest improvement in pay with a massive 104% rise, due largely to a benefits package of £376,000. John Coombe of GlaxoSmithKline suffered the largest loss with a drop in total pay of 28.4% to £947,000.

Bonuses – or the lack of them – provide the biggest variable in finance directors’ pay packets. Of the 194 FDs in the FTSE350, for whom comparable data is available (we exclude investment trusts as well), some 34 saw their total pay decline last year.

Forty-seven FDs received no bonus at all – though some of them will have joined too near the year-end for a big payout to be deemed appropriate.

Time is standing still for FDs in the FTSE100 this year, as their average age is 47 – the same as in last year’s survey.

FTSE250 FDs are exactly a year younger. There are only six FDs in their thirties in the senior index this year (down from 10), but 37 FDs in the junior index have made it to group FD level before hitting 40.

The (slightly) tongue-in-cheek ‘high-flyers’ score – for which total pay by the age of the FD – shows an interesting bias toward younger FDs this year, with the 43-year-old Peter Clarke at Man Group topping the table.

Almost all the top-10 FDs in this list are younger than average, suggesting that these are the men (they are all men!) who have made it to the very top while still having so much more to offer. It begs the question: where next for them all?

Because the FTSE250 is analysed for the first time, it’s interesting to compare how the two lists overlap. Eight FDs in the FTSE250 earn more than the FTSE100 average – and a roughly similar number of FDs from the FTSE100 index earn less than the FTSE250 average.

It is interesting to note that, with just a few exceptions, the top of the FTSE250 is not dominated by big-earning FDs from companies that have fallen out of the FTSE100 recently.

Because we have a larger sample size this year, it is easier to say something meaningful about the pay of women FDs – and, guess what, it averages about 12% less than that of their male counterparts.

Excluded from the calculations, of course, are Judy Boynton who, as of the last balance sheet date, was not on the board at Shell and so no pay information was available (but we look forward to seeing her pay quoted next year now she has been promoted).

  • All charts were published in the December issue of Financial Director, which carried out the analysis. The data has been kindly provided by BoardEx, the board and director analytical system.

More statistics

  • Bonuses – or the lack of them – provide the biggest variable in finance directors’ pay packets
  • Almost all the top-10 FDs in this list are younger than average
  • Time is standing still for FDs in the FTSE100 this year as their average age is 47 – the same as in last year’s survey. FTSE250 FDs are exactly a year younger
  • The pay of women FDs averages about 12% less than the total pay of their male counterparts
  • The top of the FTSE250 is not dominated by big-earning FDs from companies that have fallen out of the FTSE100 recently
  • Eight FDs in the FTSE250 earn more than the FTSE100 average
  • Of the 194 FDs in the FTSE350 for whom comparable data is available, 34 saw their total pay decline last year.

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