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Directors’ remuneration plummets but employee salaries hold firm

Total pay for boards of directors across this year’s CN100 has dropped by nearly 20 per cent yet average staff wages remain stable while almost half of UK construction’s top contractors increased average number of employees.

The total pay to the boards of companies in the CN100 2012 fell by almost 20 per cent according to the companies’ latest financial reports.

At an average of £1.2 million, the total remuneration paid by companies to their board in the UK’s top 100 contractors fell by 17.2 per cent, compared with the average of £1.45m posted for the previous financial year.

In contrast, average employee salaries for the top 100 companies remained stable.

Click on graph to enlarge

Average Remuneration top 10 CN100 firms

Of the 96 companies for which remuneration data was available, 25 per cent reduced their boards’ remuneration despite posting turnover rises.
A total of 40 firms cut total directors’ pay over their current financial years.

Meanwhile, 36 increased pay for their directors, with 15 of those recording a fall in revenue, though most of the percentage hikes were muted -
with the majority of those increases being worth less than 1 per cent.

Top 10 firms Interserve and Carillion recorded rises in total remuneration despite a fall in turnover - of 2 per cent and 1.1 per cent respectively - but both companies increased their pre-tax profit in the year to December 2011.

Bowmer and Kirkland remains the top paying firm for its group of directors , though at £10.4m this is 23 per cent less than the £13.5m it paid last year. At the same time, the company paid out an average salary across all its 1,471 employees that was 8 per cent higher than the previous year, standing at just over £47,000.

Of the five firms paying their boards the most, Wates, Bowmer and Kirkland and Sir Robert McAlpine paid out less to their boards of directors than in their previous financial years.

The average remuneration for boards of directors across the top 10 CN100 firms was £3.3m - almost a third higher than the £2.5m for their previous financial years.

Meanwhile, the average remuneration for the board of directors across the rest of the CN100 was £1.1m, 18.5 per cent lower than the previous year.

Four of the top 10 companies are among the 10 highest-paying for boards’ remuneration.

Among the lower paying of those that awarded directors remuneration included Ardmore Group, CN100 new entrant Buckingham Group, Laing O’Rourke, Cape Industrial Services and Imtech.

Almost one third of the CN100 paid less than £1m to their boards of directors.

Stable salaries

Despite the total remuneration of the CN100 company directors falling steeply, the average employee wage - which includes the directors’ cut - was 0.4 per cent higher, at £36,000, compared with £35,853 previously.

Those firms paying the highest average salary across all their employees include Mace and Durkan, despite the latter’s turnover declining by more than 40 per cent, according to its latest accounts.

Brookfield paid the highest average employee salary across the CN100 according to latest figures, at £90,153, but this was for the 2010 financial year and the company employs 170 staff.

In contrast, Mitie paid the lowest average salary for employees across the top 100, at £13,656, but the firm records by far the highest average number of employees at almost 63,000; the firm’s average headcount rose by more than 4,000 over the year.

Other companies paying an average salary to employees of below £20,000 are Dawnus Construction, which at £17,306 was a third lower than the average in the firm’s previous financial year, and Mears.

More than half of this year’s top 100 contractors (55 per cent) increased their average employee salary, 19 of these doing so despite falling revenue.

Firms recording the largest percentage increase in average employee salary were Rotary (84 per cent), GSH Group (51.1 per cent) and Midas Group (35.8 per cent). Midas Group recorded a drop in total directors’ pay, at £1.2m compared with £1.3m.

The biggest falls in average employee salary include Robertson, Dawnus and McLaren, though the latter slashed total pay for its directors by more than half despite huge rises in both turnover and pre-tax profit in the year to July 2011.

Across the top 10 firms, the average employee salary was 1.2 per cent lower than the previous year, at £36,963.

Those top 10 firms that increased average salary included Balfour Beatty and Kier, while Morgan Sindall’s average was 18 per cent higher in the year to December 2011 compared with 2010.

None of the UK’s 10 largest contractors featured in the top 10 league for highest average employee salaries.

Headcount rises

The CN100 firms have collectively grown their average number of employees, albeit marginally.

Almost half of this year’s top 100 contractors increased average staff numbers, with nine of these doing so despite falling turnover.

Those that more than doubled headcount include Dawnus and Imtech, though Longcross and Renew grew staff by more than 50 per cent.

At the other end of the scale, Rotary downsized its average number of staff by 40.7 per cent, while Laing O’Rourke, Lend Lease and Lagan slashed headcount by more than 20 per cent.

Average employee numbers fell at each of the top five firms. After Laing O’Rourke, Morgan Sindall saw the biggest drop in staff across the 10 largest contractors at 12 per cent, taking its average below 7,000.

Mitie, Galliford Try and ISG were the only top 10 firms that grew staff numbers over their most recent financial years - the latter by 25 per cent - while total average headcount for the 10 biggest contractors was down by 1.2 per cent.

The rest of the CN100 firms collectively saw a 2.3 per cent rise in average staff numbers.

Read more from the CN100

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