UK technology CEOs and CFOs at listed firms paid less than other sectors
The UK risks losing the best tech minds due to low pay
By Antony Savvas | Computerworld UK | Published: 09:20, 02 December 2013
A Grant Thornton review of the remuneration packages for senior executives at publicly listed UK technology firms, has found that average AIM-listed CEO and CFO pay is substantially lower than counterparts in other sectors.
This is despite average share prices in the technology sector outperforming the wider market, says the "Rewarding Performance: Executive Pay in the Tech Sector" report.
The report is based on the 2011/12 accounts of technology firms on the London Stock Exchange's main and AIM markets. The report found that average total remuneration packages for CEOs of AIM technology companies totalled £383,000 - less than half that of the whole AIM market average of £789,000.
Similarly, CFOs or finance directors of AIM technology firms received an average total package equating to £192,000, substantially below the whole AIM market average of £469,000.
The report also finds that where bonuses are paid to AIM technology executives, they are "low-level" with a significant number of AIM executives receiving no bonus at all.
The lower average remuneration packages come despite the sector's share price growth having consistently outperformed the rest of the market. The share price performance of AIM-listed technology firms over the period shows a +30 percent differential in comparison to the AIM All Share Index.
Over a longer-term five year analysis this differential rises to as much as +53 percent, Grant Thornton said.
Amanda Flint, partner and head of executive remuneration at Grant Thornton UK, said: "The substantial increases in technology share prices - particularly on the AIM market - does not generally seem to have been rewarded by performance linked pay for CEOs and CFOs in the sector.
"If the UK technology sector is to continue to attract and retain the 'brightest and the best', then it is crucial for remuneration packages to reward executives who create value for shareholders."