Rate of pay rises for finance chief executives slows

The growth in chief executives' pay in the finance sector fell this year for the first time since 1998, according to a new survey, writes Arthur Beesley

But the latest Ernst & Young remuneration guide said salaries paid to the most senior managers were still rising. The accounting firm said chief executives' pay rose on average by 6-8 per cent this year, down from increases of up to 11 per cent last year.

The survey was published as the employers' body IBEC pushes strongly for pay restraint in talks with unions and the Government on a new social partnership deal.

Ernst & Young attributed the slowdown in executive pay growth to a status quo at the top end of the job market.

Bonus payments to chief executives dropped 13 per cent this year after a long period of growth, it said.

An Ernst & Young director, Mr Kevin McGowan, said people were less inclined to change jobs during the economic downturn.

"This has resulted in the balance of power being tipped in the employer's favour, an end to the 'war for talent' in some areas, and a situation where employee benefits are less critical in retaining staff. The findings of the guide are indicative of the current employment landscape," he said.

Excluding bonuses and other benefits, the survey said the average basic salary paid to chief executives rose to €150,823 this year from €146,233 in 2001.

Some 87 per cent of companies paid a bonus to their chief executives, with the bonus rate averaging 31.5 per cent of salary.

But top-rank chief executives are paid even more. Domestic and IFSC-based insurance companies pay basic salaries of €300,000 to their chief executives.

In addition, bosses in non-IFSC banks and IFSC institutions earn basic salaries in excess of €250,000, plus performance-related bonuses and benefits.

The survey also said that salaries paid to finance directors in the banking sector rose by 14 per cent this year.

It said 30 per cent of financial service companies offered a mortgage subsidy.

Only 3.75 per cent of IFSC institutions offer childcare facilities to their staff.

Almost 60 financial services companies inside and outside the IFSC were surveyed on the rates they pay in 86 job categories.