Bonus payments to company bosses fell “markedly” last year, but board members still received awards worth almost a third of their annual salary, according to a new study.
Research among more than 200 bonus schemes found senior managers saw the sharpest cut in their bonuses, down from 20 per cent of their salary to 13 per cent, while professional and technical staff suffered a drop from eight per cent to 5.5 per cent of their salary.
Bonuses paid to junior and middle managers fell from 10 per cent to 7.8 per cent of salary, while for board members, bonuses fell from 40 per cent to 30 per cent, said Incomes Data Services.
Steve Tatton of IDS said: “These figures show bonuses remain very much an integral part of current pay packages. Although bonuses have come under fire, with criticism linking incentive schemes to the use of high-risk, short-termist business strategies, employers continue to view performance-related pay as a valuable reward tool.
“Up until last year bonuses were still holding up but the recession seems to have fed through. Senior management and professional staff were hit hardest and lost approximately a third of the value of their annual incentive payments. Despite bonus payments falling overall, board members and senior managers are still receiving a substantial percentage of their basic salary.”
The report said bonuses were generally paid out on past performance, so much of last year’s money would have been based on company and individual performances before the credit crunch began to impact on the wider economy.
“As the economy has continued to decline, or at best stagnate, and with the majority of bonus payments linked to company performance employers may have to delay, or further reduce bonus payments this year,” added Mr Tatton.