Man Group has FTSE's best-paid finance director
Kevin Hayes, finance director of listed hedge-fund manager Man Group, was the best-paid FD in the UK's FTSE 100 index of blue-chip stocks last year, according to a new survey - earning £2.9m (€3.1m) as the average pay for his peers fell 13%. Directors in the financial services industry were particularly badly hit.
But Hayes' 2008 package fell far short of the £4.65m that Guy Elliott of mining giant Rio Tinto, was paid the previous year, when he was the top earner, according to figures published by Accountancy magazine, the journal of the Institute of Chartered Accountants in England and Wales.
FDs, along with other directors, have taken a hit to their pay as a result of the financial crisis. Sally Percy, editor of the journal, said in a statement today: "The results show a significant reduction in the number of annual bonuses paid to directors during the year. And while long-term incentive schemes are still paying out, the impact of the recession will surely be seen in these schemes for years to come.”
However, she added that the lower remuneration packages could also partly be explained by a weaker pound, as some FTSE 100 companies report their results in US dollars.
The financial services sector has been particularly hard hit, according to the magazine, with only a handful of companies paying out any bonuses to directors. The tough economic conditions, combined with a more general backlash against directors’ pay, have resulted in significantly lower bonuses almost across the board.
However, one exception was Richard Meddings of the emerging markets-focused Standard Chartered Bank, who also earned more than £2m last year.
The indication that UK directors' pay seems to have suffered in the crisis stands in contrast to a recent report from the Corporate Library in the US, which found that chief executives' compensation there barely fell last year, despite a 37% tumble in the S&P 500 index. Average annual compensation for US CEOs dropped by a mere 0.08% in 2008, suggesting the link between executives' pay and shareholder returns remains weak.
The average pay of a UK FD declined to £991,000 last year, according to Accountancy's survey.
In Germany, share-voting adviser DSW found, in its annual study of German public companies' executive remuneration, that average pay among the chiefs of benchmark DAX companies dropped from €2.9m a year to €2.3m in 2008 - leading DSW managing director Ulrich Hocker to state that he saw "no signs" of excessive remuneration in the country.
The executive whose compensation package declined the most was Deutsche Bank chief executive Josef Ackermann, whose compensation of €1.4m ranked 27th out of the 30 DAX companies. The previous year, he was ranked top with €14m.
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