The average annual pay of directors at companies with a turnover of less than £5 million a year has fallen by 15 per cent in the last year according to new research.

The average annual pay of directors at companies with a turnover of less than £5 million a year has fallen by 15 per cent in the last year according to new research.

The rate now stands at £82,500, a fall of over £14,000, with the average yearly pay standing at £96,568 back in 2010.

Heads of organisations with a turnover between £5 million and £50 million fared slightly better with a 2 per cent rise in their average annual salaries to £174,287.

In comparison, the average annual pay of directors from larger organisations (with a turnover of between £50 million and £500 million) has risen by 2 per cent in the last 12 months to £174,287.

The research survey (Directors’ Rewards) conducted by workplace research firm Croner shows that 62 per cent of bosses from small companies saw a pay freeze in 2011, two and a half times more than only 27 per cent of executive directors.

Vivienne Copeland, head of reward at Croner says: ‘Despite recent reports that FTSE 100 bosses have seen a 49 per cent increase in their pay our research clearly reveals the financial position of people running small businesses is a far cry from those from much larger corporate counterparts.’

The research indicates that 36 per cent of directors now work over 50 hours a week, with 26 per cent working over 55 hours. Adds Copeland: ‘If you take into account the fact that over a quarter of directors have had a pay freeze and now work longer hours, many are facing the same kinds of setbacks as the bulk of the UK workforce.”