The biggest gaps appeared in the service and voluntary sectors where female pay is as much as 26 per cent below that of their male counterparts. In the service sector this means an average salary of £56,933 for a female director compared with £70,657 for a man. The public sector had the smallest gap (5 per cent).

The financial services sector has seen an improvement again this year and the pay gap is now 9 per cent compared with 14 per cent in last year’s survey and 35 per cent two years ago.

The average increase for directors in the Institute of Directors’ (IoD) annual Directors Rewards survey was 3.5 per cent. Basic pay for a managing director of a small company (up to £5m) is £65, 000. In a large organisation with a turnover between £50 million and £500 million, a managing director could expect to earn £141, 440.

On average, 23 per cent of non-executive directors work unpaid. Last year, 30 per cent had no pay increase and those who did had an average increase of 3 per cent.

The survey found that directors in financial services are still the highest paid. Managing directors in the public sector have maintained their position as second best paid after shooting up to that position in last years survey from 4th. ‘Other directors’ in the public sector have also now caught up with those in manufacturing and private services.

Hours of work and holidays

Nearly one in three (31 per cent) of directors in small companies are working over 55 hours a week, with 43 per cent working 46 to 54 hours. In medium-size companies, 24 per cent of directors work over 55 hours and 35 per cent work 46 to 54 hours. In large companies (£50 to £500M turnover), 35 per cent of directors are now working over 55 hours per week and 53 per cent work 46 to 54 hours.

The survey also shows that directors seldom take their full holiday entitlement. In medium and large companies around 35 per cent of directors are entitled to 30 days holiday, but only around 20 per cent take this many days and around a quarter take 20 days or fewer.

Overall, 63 per cent of fully executive directors were eligible for some form of flexible working. The offer of flexible working varied by company size with 78 per cent of directors in small companies being eligible compared with 57 per cent in medium companies and 46 per cent in large companies.

Regional pay

Executive directors in London can earn around a quarter more than their counterparts in Scotland (£80, 000 compared with £64, 851). Companies in the North East pay the average director one per cent more than the national rate, whilst those in Scotland, North West and the Midlands pay as much as seven per cent below the national average.

Miles Templeman, director general of the IoD, expressed disappointment that this year the survey shows that the gender pay gap has actually increased.

“Unless we can achieve equality of opportunity in the near future, we will inevitably face further regulation in this area. The only way to rebut this is for business to act quickly. It is wholly unacceptable in this day and age that it appears that women in comparable positions do not receive the same rewards as their male counterparts,” he said.

Templeman also pointed out that the survey shows, as in other years, that the average pay increases received by UK directors is 3.5 per cent and that average overall remuneration is “nowhere in the same league as the sorts of figures that are so often headline news”.

The Institute of Directors’ (IoD) annual Directors Rewards survey analysed 3,945 jobs from around 1,200 organisations. The results are based on evidence drawn from all sectors and size of organisation.

Lowest value 

By contrast, the Office for National Statistics (ONS) released figures on Wednesday that indicate that the gender pay gap for UK full-time employees as a whole narrowed between 2006 and 2007 to its lowest value since records began.

The gap between women's average hourly pay and men's was 12.6 per cent, compared with a gap of 12.8 per cent recorded in April 2006. The average hourly rate for men went up 2.8 per cent to £11.96, while the rate for women increased by 3.1 per cent to £10.46.

The largest difference was in the South East region, where women's average pay was 15.9 per cent less than men's. The smallest gap was in Northern Ireland, at 2.8 per cent. On the internationally comparable measure based on mean earnings, women’s average hourly pay excluding overtime was 17.2 per cent less than men's pay, showing a decrease on the comparable figure of 17.5 per cent for 2006.

In 2007, average weekly earnings of full-time employees for women of £394 were 21 per cent less than those for men (£498), unchanged from 2006.

Women's weekly earnings, including overtime, were lower than men's. This was partly because they worked fewer paid hours per week. Based on hourly earnings excluding overtime, women's earnings increased more slowly across the bottom 10 per cent of the distribution than men's, with a growth of 3.0 per cent compared with 3.7 per cent for their male counterparts. The hourly earnings of the top 10 per cent grew by 2.8 per cent and 3.2 per cent respectively.

Although average hourly pay provides a useful comparison between the earnings of men and women, the ONS said it does not necessarily indicate differences in rates of pay for comparable jobs. Pay averages are affected by the different work patterns of men and women, such as the proportions in different occupations and their length of time in jobs.

Related links

• Institute of Directors
• Office for National Statistics