Longer hours, fewer holidays and pay freezes... Croner's latest Directors' Rewards Survey reveals a picture of bosses meeting unprecedented challenges

Hard-working, dedicated, motivated by growing their businesses and prepared to accept a pay cut in tough times. It's hardly the typical image of the fat-cat director that much of the media enjoys portraying. And yet it's exactly the picture that emerges from the latest Directors' Rewards Survey conducted by Croner.

The research reveals a culture of long hours (42 per cent of directors in small firms work more than 55 hours a week; 21 per cent more than 60 hours; few rarely take all their holidays). The average director works 40 hours in the office, 10 hours at home and 10 hours on business travel a week.

So what rewards do they get for this effort? Average pay for all directors has risen by two per cent in the past year, which is roughly in line with increases awarded to clerical and operative-level staff over the same period. But 37 per cent reported they had not received a pay increase and nine per cent even took a cut. For those who saw pay reduced, the typical reduction was 15 per cent. The picture for 2011 looks similarly mixed, with almost a third of directors (31 per cent) forecasting a pay freeze. Where directors expect an increase the most common prediction is for a three per cent rise.

About half of respondents said that their pay is based on performance, although this is more likely in large firms (53 per cent) than small (45 per cent) or medium-sized (48 per cent) firms. Another factor that has affected directors' pay is the remuneration of other employees, with 70 per cent claiming that it "had some influence" or was "an important consideration" in setting their own pay.

The typical salary for a managing director in a small firm is £70,000, with other directors paid £60,000. This rises with the size of the organisation and a managing director of a large firm typically earns £128,000, with other directors paid £88,000. Non-executive pay follows a similar pattern, ranging from £12,000 up to £20,000.

Just over 40 per cent of all directors received a bonus in the past 12 months and that bonus was typically £25,000 for managing directors and £15,000 for other directors. As expected, the pattern of bonus levels closely follows that of basic pay. Overall, directors in larger companies were almost twice as likely to receive a bonus (52 per cent versus 27 per cent).

The pattern of pay by sector followed that established in previous surveys, with directors in financial services earning the most, followed-perhaps controversially given the climate-by public sector directors.
When it comes to the non-pay aspects of reward, pensions and company cars again stand out as key perks. Directors in small firms are understandably much less likely to have a final salary pension scheme in place (five per cent compared to 22 per cent of directors in large firms) and when it comes to choice of car, directors of small firms appear to favour Audi and BMW, while the latter is the vehicle of choice among directors in larger companies.

To purchase a full copy of the research or to find out more about Croner, visit www.iod.com/rewardmanagement

Methodology
Croner sent a questionnaire to 45,000 IoD members and received 745 responses. Appropriate and matching results from the Croner Reward pay database for director and senior manager positions were added to this data. A total of 3,381 jobs in about 1,000 organisations were analysed.