Magazine article Management Today

Best Paid Boards

Magazine article Management Today

Best Paid Boards

Article excerpt

Lord Hanson, doyen of the British takeover business, and his board enjoy a certain lifestyle that few of their peers in business can match. But then an average salary of some 500,000 pounds a year does help to smooth the rough edges off life.

The 14-strong Hanson board emerges as the best paid per head of any major boardroom in Britain, according to an exclusive survey produced by Extel, the financial information group, for Management Today.

Not far behind comes the pharmaceutical giant SmithKline Beecham, where the recent pay hike of chief executive Bob Bauman, to 1.22 million pounds, has helped lift the average remuneration of the 17-strong board to nearly 465,000 pounds a year.

Last month, we looked at the performance of Britain's top companies based on the amount of profit achieved per employee (PPE). Matching this information with the average salary paid to company directors gives an insight into how valuable they are to their employer. At Hanson, for example, where each employee earns the company on average some 16,060 pounds in profit, it takes the collective efforts of 31 Hanson employees to pay the salary of a single director.

But the company which values its directors most highly -- and rightly so after the transformation they have achieved in the last two to three years -- is hotel, catering and brewing giant GrandMet. Though its profits per employee are only 6,650 pounds, the directors, led by Sir Allen Sheppard, are among the best-paid in the country. It takes 62 staff to foot the bill for one board member (average remuneration is some 411,111 pounds).

The one group which collectively has yet to enjoy the fruits of market forces is that of the newly privatised water companies. Though our survey last month recorded spectacular gains in the profits achieved per employee for the water companies, their boards of directors appear to endure what -- by Hanson or GrandMet standards -- is a restrained lifestyle. The bottom four in our accompanying table are all recently privatised water companies. At Anglian Water, the 30,000 pounds average salary for a director is barely double the average profit-per-employee.

Fifth from bottom comes Northern Foods, where the directors' average remuneration works out at the not-so-princely 57,143 pounds. But then Chris Haskins, the chairman, is well known as one of the few Labour supporters in business. A case perhaps of putting one's money where one's principles lie. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.