Extract from IDS Executive Compensation Review 307, September 2006

Managers’ pay awards remain broadly steady

Pay planners looking to determine their salary budgets over the coming period are having to make decisions in the face of mixed economic signals about inflation, output and labour market trends. To help, we put current management pay award developments in context in our third quarterly round-up of 2006. Altogether, we analyse some 121 private and public sector managerial salary reviews conducted during the three months to July.

During the three months to July 2006 salary increases for managers and professionals in the private sector were marginally higher than three months earlier, but seen over the longer-term they were broadly in line with past trends. Analysis of the distribution of the latest awards shows that salary rises are being restrained within a narrow frame and an examination of the background in which the latest awards have been made shows that despite a bullish economic outlook in some areas, there are signs that employers are exercising caution. The Bank of England’s Inflation Report for example, reports that companies have responded to rising costs, such as energy and commodity prices, by reining in increases in other costs, such as salaries. This article provides tables showing the latest management pay settlements and analysis is provided by industry sector and level of seniority.