AIM directors see inflation-busting rise in earnings

By SCOTT REID
Published on 08/10/2012 00:00

Directors of companies quoted on London’s junior stock market enjoyed inflation-busting pay rises last year, according to new research which suggests that the “shareholder spring” has failed to put the brakes on executive pay.

Total earnings for directors at firms on the Alternative Investment Market (Aim) rose by 5.7 per cent over the year to April to a median £195,000, more than twice as fast as average pay settlements for the UK workforce as a whole.

The rise was partly caused by an increase in bonuses for Aim bosses, which also increased by almost 6 per cent at the median, from £50,000 to £52,861.

Steve Tatton, editor of the pay report, by Incomes Data Services (IDS), said: “Shareholders are happy for directors to receive bonus payments if they are genuinely tied to strong company performance – the worry is if the high bonus culture exists without sustainable returns being created for investors.

IDS said Aim directors’ pay has grown rapidly over the last seven years, with median total earnings increasing by 58 per cent, against a 21 per cent increase in average weekly earnings.