18-21-directors-pay.qxp 14/12/09 14:29 Page 21
~FINANCE~
Of the 100 best-paid directors in the million and issuing investors with a tripled over 2008, although of course the value
research, the average pay package for a dividend of 1.5p per share. of most companies diminished significantly
CEO was £525,234. The component of The second and third highest-paid during the year.
basic pay within this was around £300,168. directors are at online gaming company Remuneration strategies at public
On average, these companies turned over Sportingbet and global engineering group companies are always going to come under
£149 million and their average market scrutiny. While Directors’ Pay on AIM 2009
capitalisation was £106 million. shows that some of the excesses of years
The highest pay package in this year’s ‘It’s a terrible situation that gone by may have dissipated somewhat during
study was the £2.2 million (HK$31.97
companies making losses are
the past 12 months, there still appears to be
million) in salary, bonus and pension an attitude in many of AIM’s boardrooms
contribution paid to the senior executive
paying huge amounts to
that potential is what gets rewarded, rather
of Hong-Kong based biometrics and their directors’ than solid performance. If the same approach
radio frequency products specialist RCG continues into 2010, shareholders may finally
Holdings. This pay package represents 1.6 start to ask some tough questions. ■
per cent of both the company’s turnover Kentz, which respectively paid their chief
and its market capitalisation, which are both executives £1.57 million and £1.45 million. For more information about the full, comprehensive
just over £140 million. The company has Total pay for the top 100 best-paid report, Directors’ Pay on AIM, contact Blanka
delivered for shareholders, generating executives is on average 1.7 per cent of Biernat on 020 7250 7056 or email
profit growth of 35 per cent to HK$613 their company’s average market valuation blanka.biernat@vitessemedia.co.uk
WHAT ARE YOU WORTH?
The fact that the remuneration of directors most recent financial period, and there is providing long-term focus and alignment
played some role in the downfall of the little information about the pay increases with shareholders. Many of these options
banks, sparking the current economic currently being awarded. However, Deloitte will now be underwater and companies may
situation, has thrown executive research covering FTSE SmallCap want to look at ways of managing the
remuneration more generally into sharp companies indicates that around 80 per motivational issues this creates.
relief, not only for shareholders, but in cent of companies will not award a salary While the primary aim of the
the wider public arena. increase to directors in the 2009/10 period, remuneration strategy should be to support
AIM companies tend not to be subject and it seems likely that many AIM the business plan, aspects such as retention,
to quite the same degree of scrutiny as companies will follow suit. motivation and taxation will all require
companies listed on the main market. As Another striking finding from this careful consideration over the next 12
there is currently no requirement to disclose research is that the overall level of bonuses months. We hope this research will help
the remuneration of individuals, the trends paid to all CEOs in AIM companies has companies in their deliberations.
are not as readily apparent as they are in decreased from over £36 million last year to
companies listed on the main market. But it just over £23 million this year. While the Bill Cohen
is clear that the current environment is median bonus payment has increased, these Partner
affecting AIM companies. numbers indicate that those paying higher Executive Remuneration Consulting
While overall pay has clearly continued to bonuses are paying less this year, and we Deloitte LLP
rise in AIM companies, the rate of growth expect this trend to continue.
has slowed significantly. Of course, this For the majority of AIM companies,
research looks at how pay moved in the share options are the favoured method of
BUSINESS XL 21
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76