Grant Thornton report identifies the prevailing pay gap between technology and other sectors
Salaries for CEOs and CFOs at AIM-listed technology companies have increased but remain well below the mean remuneration for peers across other sectors, according to a report by Grant Thornton.
Based on the 2012/13 public accounts of technology firms on the London Stock Exchange’s Main and AIM markets, Grant Thornton’s analysis finds the average CEO remuneration package at AIM technology companies rose by 55% compared with the previous year, to £593,000.
However, a significant differential still exists between the sector and mean salaries across the entire AIM market, with technology CEOs receiving around a third less than peers on average.
The report presents similar findings for CFOs of AIM listed technology companies, who received mean salary packages of £292,000 versus the £540,000 full market mean. This represents a year-on-year increase of 52% in sector CFO pay, although this is still some 60% below what other AIM listed CFOs were granted.
The figures come despite the sector’s notable share price performance, which has continued to surpass the AIM market average. Throughout 2013, technology companies outperformed the AIM All Share index by a 26% differential; and by 81% over a five-year period.
“It’s encouraging to see that salary levels for tech executives are headed in the right direction towards catching up with peers in other sectors, although there will still be a concern over the current disparity,” said Amanda Flint, partner and head of executive remuneration at Grant Thornton UK.
“Despite some volatility in the tech sector’s performance over the past year, share prices have continued to climb and outperform the averages on both the AIM and Main Market, which suggests investors still have considerable faith in their future prospects.
“The UK’s technology sector is at the forefront of innovation and development of new ideas and technologies, and is well positioned to flourish at a global level and drive further growth throughout the economy.
“In order for it to attract the right talent and skills it needs to fulfil this potential, there’s a need to ensure that the reward proposition is attractive and executives are adequately compensated for the value they’re delivering to shareholders.”