Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Earnings enigma

Directors' salaries How much does your boss earn? NCE has discovered substantial differences between the salaries of the highest paid directors of British consultants.Ian Lawrence investigates.

Have you ever wondered how much your boss is paid? Or how this compares with the salary on offer at your competitor?

NCE has researched the basic salaries awarded to the highest paid directors of the top 20 largest consulting engineers.

Our research is based on figures lodged at Companies House for 2003. Fourteen of the top 20 firms declared the salaries of their highest paid directors.

Not all were prepared to name the individual concerned. But those that did submitted figures that included basic salary, fees, bonuses and expenses, while excluding the value of share options or gains made from the sale of shares, retirement benefits, and compensation for loss of office.

Those who failed to file salary figures were US firms with UK divisions, or partnerships.

Neither are obliged to file the information at Companies House.

Our research threw up a few surprises. It indicated that the best paid director at Mott MacDonald earned more than the highest paid directors of the other firms. But the company is by no means the biggest. The unnamed director was paid £710,532, while Mike Jeffries, who was chairman and chief executive of largest consultant Atkins earned £507,000.

Last year, Atkins' turnover was £935.3M, while that of Mott MacDonald was £462M.

The figures also show that the highest earners at Atkins and Mott MacDonald were paid more than the country's highest-profile civil engineer, Network Rail chief executive John Armitt, who earned £468,000.

Dr Alan Hearne, chief executive of RPS, also earned more than Armitt, with a salary of £470,000. This is despite the fact that RPS has the 11th largest turnover among the firms that submitted figures to Companies House.

Hearne was paid considerably more than the top person at Arup who earned £310,000. This is despite the fact that Arup's £394.5M turnover was treble that of RPS.

Among contractors, only Taylor Woodrow and Amec paid their highest paid directors more than those at Atkins and Mott MacDonald. Amec chief executive Peter Mason earned just over £1M for running his £4bn turnover business, while Taywood's highest earner got £738,000 for generating £2.6bn in turnover.

Like their competitors at Arup, Halcrow directors' salaries are also small compared to the size of their businesses. The top earner there received £178,622 although the company's turnover was £209.7M.

FaberMaunsell paid its biggest earning director £204,207, although it generated a turnover of £109.8M, smaller than that of Halcrow.

Rooted to the bottom of the pay league was Scott Wilson, whose group chairman Geoff French received £118,000. This was despite the firm generating a turnover of £152.6M. Capita Symonds, whose turnover is closest to Scott Wilson's at £155.2M, paid its highest earning director £250,000.

Mott MacDonald director Peter Chesworth justifies the salary paid to his firm's highest paid director on the basis of the company's size and performance.

'We are a large company - our income is £500M. We are one of the largest private companies in the country and certainly one of the largest employee-owned companies in the country.

'The salary is a minor proportion of that figure. The vast majority of that remuneration is related to the performance of the company and goes up and down accordingly.

It was a good year - as good as any year. We had reasonable performance everywhere.'

Remuneration policy at Atkins dictates that basic salaries are 'set at a level which corresponds broadly with the median salaries for executives in comparable businesses', according to its 2003 annual report. Up to 60% of this salary is bonus related.

The appearance of Dr Alan Hearne of RPS among the top three earners may seem surprising given the company's turnover, but his relatively rich rewards could be related to the length of his reign and external recognition. He joined the company's board in 1979, becoming chief executive in 1981, led the firm into its Stock Exchange flotation in 1987 and was named plc entrepreneur of the year in 2001.

But length of service does not always equate to a large salary, as French has been at Scott Wilson for 36 years. 'We haven't deliberately suppressed my salary but we feel there ought to be a sensible balance of salaries across the whole organisation, ' says French.

'The directors should be a good benchmark of what graduates are getting. If graduates are starting on £20,000, to be paying yourself more than 30 times that would be excessive in my view.'

He said pay at Scott Wilson was in line with industry standards for junior staff, the only difference being the absence of a 'huge gulf' between directors and the rest. 'We do have a variable pay element but that's only about 15% of the salary, not a huge percentage.

'If you are truly making this sort of level of profits that justify huge levels of pay to senior directors, then you should be cascading it down to all levels, rather than taking it in huge bonuses. We exist through our staff earning fees for us.'

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Please note comments made online may also be published in the print edition of New Civil Engineer. Links may be included in your comments but HTML is not permitted.