Pay gap widens at top

The pay gap between company directors and middle managers has nearly doubled in four years, a survey of 350 companies says.

In 1990 board members were being paid salaries 30 per cent higher than the average for "functional heads". By last year the differential had widened to 58 per cent. Pay consultants, Sedgwick Noble Lowndes, found that the average director now earns nearlytwice the pay of department managers.

In just 12 months, bonuses paid to directors rose by a third from £12,222 to £16,801, the consultants found in a survey of 4,500 executives. The findings reinforce the view that directors are rewarding themselves at the expense of junior colleagues.

Andy Christie, a director at Sedgwick, contends however that after staff cutbacks in the recession, surviving directors have become "prized assets as key players in the future development of their businesses".

He points out that chief executives have showed some restraint. Since 1993 their average salary increases declined from 6.2 per cent to 4.8 per cent.

The highest salary increases were in medium-sized companies. Their executives received 5.6 per cent compared with 5.4 per cent in big companies with a turnover of £600m plus. Small firms with sales of less than £100m gave managers rises of 4.5 per cent.