A few days back I was sent an advance copy of GrantThornton’s Rewarding Performance Report which looked into the pay of Executives of quoted UK technology companies – Main and AIM.
Basically the report found that ‘on average’, AIM-listed CEO and CFO pay was substantially below their counterparts in other sectors. Average £383,000 compared to an average of £789,000 for the whole AIM market. The same dichotomy applied to CFOs too. Grant Thornton rang alarm bells about how this ‘low pay’ would affect the ability of the sector to attract the right talents and skills.
However, although the report took into account LTIPs and associated share options, it did not cover share holdings. So, when I was approached by Sally Davies the new Technology Correspondent at the FT, for my comments on this, I pointed out that most CEOs of AIM Tech companies were actually major shareholders – often resulting from them being founders too. Indeed I gave the example of David Richards, the co-founder of WANdisco. He ‘only’ gets paid around £220K pa but he now has shares worth over £50m and options on top of that plus what he may have sold in the past. Indeed most of the CEOs of AIM tech companies have reasonable, sometimes even substantial, shareholdings.
That’s why, when Sally called me for a comment, I both gave her the WANDisco example and the quote – UK technology entrepreneurs “are hoping for the big IPO, the big purchase by Google or Facebook”, says Richard Holway, Chairman of research firm TechMarketView. “What they’re not necessarily worried about is the amount of money they’re taking home today.”
George O’Connor at Panmure Gordon said “Rather than a class of professional managers, the sector is more defined by founders, innovators and people who are trying to drive change”. For the full FT article, click here.
Where remuneration matters rather more is for the technical talent such UK tech companies need to garner. A subject we will return to again no doubt.