Pay bonanza on AIM

Amid all the recent economic and financial turmoil afflicting business, AIM companies have continued to increase their directors’ salaries.

Median pay for AIM chief executives rose almost eight per cent from £175,000 to £190,000 last year, according to new research from sister publication Growth Company Investor in association with business advisory firm Deloitte. This marks a 53 per cent rise since the research first began in 2003.

Combined boardroom pay accelerated even faster, rising 14 per cent to a median of £490,042, as 57 per cent of companies increased the amount of cash paid to their directors compared to the year before. Boardroom pay has grown 52 per cent from £322,500 since 2003.

Although companies making losses continue to pay their chief executives less than their profitable peers – a median of £172,000 compared to £216,000 – many heads of companies losing very large amounts still take home above-average pay packets. Mining and exploration concern Mwana Africa, for instance, paid its chief executive officer £448,000, including not insubstantial bonuses after a successful fundraising and two acquisitions, despite losing £210 million before tax on revenues down by almost two thirds as the company focuses on acquiring and developing assets before it can generate profits.

And, after losing an even bigger $313 million (£170 million) pre-tax, Clipper Windpower, despite having only two executive directors on its board and seven non-executives, paid out $3 million – of which almost $1 million was in bonuses. Likewise, companies with low turnover and low market valuations – other means of setting appropriate pay – also chose to award considerable remuneration to senior management.

In a year when pre-tax losses swelled more than eightfold to £8.3 million on sales down 36 per cent to £15.1 million, property management concern Safeland paid its board £1.9 million – almost 13 per cent of that year’s turnover.

One of the highest-paid boardrooms was that of Aero Inventory, the award-winning supplier of aeroplanes spare parts which has recently gone into administration following accounting irregularities. Last year it paid out emoluments of £3.1 million, including $1.7 million of bonuses and a further $2 million of bonuses that were included in the accounts but not yet distributed.

The full report, Directors’ Pay on AIM 2009, is available from Growth Company Investor.

Nick Britton

Nick Britton

Nick was the Managing Editor for when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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