Women Bosses Still Not Earning Their Due, says IoD

3 November 2005

Female executives are still getting paid less than their male colleagues, new research to be published tomorrow, will show.  Despite more women reaching the top rung of the corporate ladder, they still earn, on average, almost 25% less than men, a survey of boardroom Britain by the Institute of Directors (IoD) and Croner Reward, reveals.

The findings show that across companies of all sizes a female director now earns an average of £55,000 per annum compared with the average male executive’s basic pay of £72,100. In a further knock to the image of the City of London, the biggest pay gap occurs in the Financial Services Sector where women bosses earn 35% less than their male counterparts.

The Public Sector has the smallest gender pay gap at 7%, and also has the highest proportion of female directors, 21%.

Miles Templeman, Director General of the IoD, said:

“Although we are, fortunately, seeing more and more women reaching board level within organisations, the rewards of accomplishing that feat are still being distributed unevenly. If the jobs are the same clearly the pay should be equal. Talent and hard work have to be paid for regardless of gender.”

The IoD’s annual Directors R£wards survey, carried out by Croner Reward, also found wide disparities of executive pay within different regions of the UK. London-based directors, for example, earn around £35,000 more than bosses in Northern Ireland. In general, directors in the South East enjoy 5% higher salaries than the national average, while counterparts in the East Midlands earn 14% under.

Overall, the survey found that Managing Directors of small and medium sized companies received an average pay rise of 4% last year, while MDs of large companies got 4.2%. And, despite concerns over stuttering economy growth, bosses are expecting similar increases next year.

The IoD said it was pleased to see its promotion of Remuneration Committees paying off. As well as some 75% of large companies now using the Committees to set board pay, the trend is developing amongst medium and small companies, particularly those with strong non-executive involvement.

Vivienne Copeland, Client Services Director of Croner Reward, said:

“This survey, covering such a wide range of British boardrooms will prove invaluable in benchmarking directors’ remuneration packages to not only retain the best but attract replacements without compromising company objectives.”

As well as remuneration the survey also looked at other aspects of executive life including working hours and holidays. Belying the image of a heady round of fat cat lunches and corporate junkets, 83% of UK directors put in over 46 hours a week, with only 60% taking their full holiday entitlement.

Miles Templeman, said:

“Our annual survey of executive pay and conditions stands in stark contrast to other studies which concentrate on FTSE 100 directors. It paints a more accurate picture of corporate life in the UK, one dominated by hard work and modest rewards. Taken from all sectors and sizes of company this is the definitive guide to how much boardroom Britain really earns.”