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CMA Recruitment Group – 2016 Executive Remuneration Survey


“We have seen a significant increase in total executive remuneration, driven principally by higher bonus awards contrasting limited movements in base salary. As we saw in 2015, there is a clear increase in formal share schemes and a trend towards profit-related remuneration.”


The CMA Executive Remuneration Survey


In 2015, CMA identified the need for an in- depth study into the remuneration profile of the region’s leadership. This is now the second detailed research exercise CMA Executive has undertaken. The data has been collected from over 100 senior executives in the region, carefully selected to provide a diverse and representative sample of southern commerce and industry.


The survey seeks to address not only quantitative elements of remuneration, but also explore the trends in executive opinion. The Executive Remuneration Survey is complemented by surveys undertaken by CMA with respect to the Group’s other divisions, namely accountancy and finance, HR and practice.


The key findings Overview


In 2015, executive base salaries increased by an average of 3.2%. However, in 2016 we saw just a quarter of executives receive an increase in base salary. Instead, increases in remuneration were weighted to variable pay (ie bonus). While in the larger corporates this was in the form of long-term incentive plans, in the SMEs this was typically a percentage of base salary ranging from 10% up to 100%.


Executives in the larger corporates and listed entities receive higher base salaries than those in SMEs – the differential for the survey’s participants was 8% in the favour of the corporates. Total pay (which assumes full variable pay is received) was considerably higher for SMEs than it was in 2015, most likely due to improved profitability having a more direct impact on executive remuneration in the smaller businesses.


CEOs and MDs


Base salaries ranged from £92k up to £185k, with an average of £136k. Total pay reached an average of £230k. It is of note that while total pay does not include equity options due to the challenges in estimating the likelihood of them vesting and at what price, as in 2015, we have noticed a further increase in EMI schemes within SMEs. The schemes further align the interests of shareholders and the company’s leadership team. As might be expected, this was particularly pertinent in PE-backed businesses.


On average, CEOs and MDs received a base www.businessmag.co.uk


CMA Executive Recruitment


CMA Executive, a division of CMA Recruitment Group, undertakes search and selection exercises in the £75,000 to £250,000 salary banding, where professional contacts and market knowledge provide the foundation for a successful recruitment campaign. A prominent adviser to many market leading businesses across the region, the division supports a diverse range of industries and sectors, as well as a variety of ownership structures.


Our executive team possess more than 70 years combined knowledge and experience in providing the boardroom and leadership talent which our clients need to realise their strategic goals, consistently delivering successful recruitment campaigns for owner-managed businesses, private equity and venture capital-backed enterprises, in addition to listed companies.


THE BUSINESS MAGAZINE – SOLENT & SOUTH COAST – APRIL 2016


salary 21% greater than CFOs and FDs. The variance increased to 45% when considering total pay.


CFOs and FDs


Base salaries for CFOs and FDs ranged from £68k in smaller companies (less than £10 million turnover) up to £165k in the larger Corporates (over £100m turnover), with an average of £113k across all FD participants. Average total pay for CFOs and FDs was £159k. Total pay includes car allowances which were relatively consistent across all executive participants at £10k.


Attraction and retention


When asked whether executives feel appropriately remunerated, 59% agreed and a further 14% strongly agreed. Over half of the participants also believe that remuneration would not be the key consideration in selecting their next role. This suggests that while pay is always going to form a cornerstone of any decision, the south’s executives are increasingly looking for alternative rewards. The remuneration survey overwhelmingly suggests that this is in the form of equity – 41% of executives strongly agree that the potential for equity would be the key consideration for their next role. To support this sentiment, 69% did not believe that remuneration constraints had prevented their company from hiring or retaining key talent.


Conclusion


CMA Executive would encourage you to read the full Remuneration Survey for detailed analysis, graphical presentation and conclusions relating to your company size and sector and the executive position in question. However, it is fair to say that executive remuneration is becoming increasingly


sophisticated in the south and the need to seek professional recruitment advice is becoming greater. The days of merely tweaking base salaries are gone and the south’s executive talent is asking for greater alignment with shareholders – both in terms of engagement and reward mechanism, ultimately empowering executives to directly influence their pay.


Further information


The full CMA Executive Remuneration Survey will be published in April and will be available on CMA’s website or directly from George Weston or Ruth Snell (contact details below). This is in addition to surveys relating to CMA Recruitment Group’s other divisions: accountancy & finance, HR and practice.


Should you wish to discuss any of the points raised in this article, or indeed discuss any other executive recruitment matter, contact George Weston or Ruth Snell.


Details:


George Weston george.weston@cmarecruitment.co.uk 023-8063-8046


Ruth Snell


ruth.snell@cmarecruitment.co.uk 023-8063-8046


www.cmarecruitment.co.uk


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