Extract from IDS Executive Compensation Review 325

Senior management pay disclosure below board level

Responsible for implementing business strategy set by the board, senior managers play a central role in shaping any organisation’s future success. But while there are no rules requiring compulsory disclosure of their remuneration, some companies are choosing to provide limited details. In this article we review the latest FTSE 350 annual accounts to see what insights they provide into the pay of this important management group.

The article looks at details disclosed in annual accounts with year-end dates falling between 31 December 2006 and 30 September 2007, and finds that the number of companies providing details on remuneration below board level is quite low. On the other hand, when companies outline their remuneration policy for executive directors it is now common to find the inclusion of a statement that both the remuneration structure and reward principles governing senior management pay is the same. Where more detail is provided, disclosure practice varied, with some publishing actual remuneration levels by named executive and others showing the distribution of senior management earnings in pay bands. Tables provide data on salary and fees by named company as well as senior manager’s salary differentials with lead executives of selected FTSE companies.