Executive pay fell in 2010, according to new survey

The majority of company directors in the private sector saw their pay cut in real terms this year, according to the Institute of Directors (IoD).

Research published by the IoD, which represents more than 45,000 members, found that 46 per cent of directors in large unlisted companies or small and medium-sized firms either saw their pay frozen or cut in cash terms in 2010.

The average pay increase for those who received one was 2.5 per cent, which the IoD argued was a cut in real terms, once inflation is taken into account.

The IoD claimed that pay cuts for top managers were not being compensated for by increases in bonuses. The average bonus, where awarded, was 20 per cent lower than in 2009.

The average bonus for a director in a small company was £10,000; in a medium firm it was £12,600 and in a large company it was £17,200.

Miles Templeman, director general of the IoD, said the survey "kills the idea that company directors are beginning to enjoy big pay rises at the very moment a pay freeze takes effect in the public sector".

Templeman, who is also chairman of Kent brewer Shepherd Neame, said: "For the second consecutive year, most directors are seeing their basic pay and bonuses go down. Clearly the impact of the recession on director remuneration is still being felt.

"When politicians and other individuals attack the private sector for excessive pay they ignore the fact that the majority of private sector directors earn about the same as a school head teacher or an ordinary NHS general practitioner," he added.

Pub industry observers will be watching to see what - if any - sort of pay increases and bonuses senior executives across the sector receive when their companies' next annual reports are published in the coming months.