The money men

This snapshot of executive pay across our sector reveals several significant trends, even if it can only provide a partial view, glimpsed through the rear-view mirror.

Our top 40 includes only executives running listed firms, for example. I have no doubt there are plenty of well-rewarded people at the top of privately held concerns, but alas, we can’t readily get hold of data about how handsomely or otherwise they’ve been paid.

We can, however, get reliable figures for companies that are both listed and based in the UK. They are required by law to publish executive remuneration in their annual reports.

We have taken a fairly broad definition of what constitutes a property firm, so our list includes consultants and construction contractors as well as developers and agents, plus the odd REIT. However, most listed REITs don’t have executives that fall within the reporting requirements.

There is, unfortunately, no way to create a list that perfectly captures up-to-the-minute remuneration of leaders across our industry. Annual reports are published on a variable schedule according to each company’s chosen financial year.

Property companies in our study had year-ends that fell in January, March, April, June, July, September, October and December. Any calendar date chosen to tot up the numbers will unavoidably include a minority of pay data that is around a year out of date.

We chose a cut-off date in the second week of August, right after the publication of Berkeley Group’s annual report. This seemed a good point, given that the housebuilder contributed five out of the top 40 executives this year and would have contributed six had we published a top 40 a year ago.

Our initial search for data found 139 executives in the most recent year, who collectively earned £183m through salaries and bonuses. The same exercise a year ago would have netted 130 individuals who earned £199m in total. It is plain that average earnings at the top of listed companies fell year on year – as you might expect, given current economic difficulties and the widespread clobbering of share prices over the past year.

Given the time limits imposed on our study, it will be no surprise to find an even steeper decline next year, as tumbling asset valuations and declining share prices feed through into long-term incentive plans, barring any unexpectedly rapid recovery of recent losses.

Another unsurprising result is the general absence of women among the highest earners in our study. Had we published a top 20 or top 25, there would have been no women at all, given that only three female executives appear in the top 40, ranked 28, 29 and 38.

Three out of 40 is surely the most shameful figure to come out of the whole exercise, and on that front, I sincerely hope to see change for the better over the next 12 months. Business success in the face of headwinds demands fresh perspectives, not more and more of the same.