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Directors of SMEs are no better - and in some cases worse off - than they were five years ago.


While the average pay for FTSE 100 (INDEXFTSE:UKX) directors keeps rising (27-fold to £4 million in nearly 25 years), the average 2011 annual pay for directors of small companies, with a turnover of less than £5 million a year, has fallen by £5,000 from the levels of five years ago (£87,500 in 2007), new research finds.  

In the last 12 months alone, their average pay has fallen by 15% - or over £14,000 – taking their total pay package to £82,500 (in 2010 it was £96,568).

Larger organisations


Directors of larger organisations, with a turnover of between £50 million and £500 million, score marginally better, according to the research by HR consultancy Croner, with an increase of 2% over the last 12 months in average annual salaries to £174,287.

Heads of medium-sized organisations, with a turnover of between £5 million and £50 million, fared best last year, although with a still modest 3% increase, taking their package to £128,699.

Pay freeze


Vivienne Copeland, Head of Reward at Croner, says: "Despite recent reports that FTSE 100 bosses have seen a 49% increase in their pay, our research clearly reveals this is not the case for the majority of directors in British boardrooms.

"The average pay of all FTSE 350 directors rose by 108% between 2000 and 2010. The financial position of people running small businesses is therefore a far cry from their much larger corporate counterparts."

The survey has found that 27% of executive directors have had a pay freeze in 2011, with a further 7% taking a pay cut. The largest impact has been on bosses of small companies: two and a half times as many as those in large companies (61%) have seen their pay frozen.

Other key findings


- The average pay for a managing director in a large company is almost twice that of their counterpart in a small company.

- Executive directors in the South East can earn around 7% more than their counterparts in the West Midlands (£80,000 compared with £75,030).

- A managing director in a manufacturing company earns an average salary of £105,327 compared with their counterpart in the voluntary sector on £76,858.

- 36% of directors are working over 50 hours a week, with 26% of them working over 55 hours. 41% of directors are entitled to 30 days holiday a year but only 11% take 30 days.

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