Crunch brings directors’ pay rises to a grinding halt

Remuneration for the 10 best-paid directors in construction and housebuilding fell 1.3% last year, as the effects of the credit crunch began to be felt.

The finding, published in Building’s Top 150 supplement, is in contrast to the 2006 results, when the 10 highest-earning directors increased their pay by up to 179%. The average hike was more than double the average 69% improvement in their companies’ pre-tax profit.

The best paid director was employed by Bowmer & Kirkland, the Derbyshire-based private contractor, who took home £8.6m. This was more than £6m more than anyone else in the industry. For the previous three years the best paid director was Stewart Milne, chair and chief executive of the Aberdeen-based housebuilder Stewart Milne Homes.

Tony Pidgley, the Berkeley Group chief executive who was the third best-paid director last year with £2.4m, said there would not be “any significant increases” in pay for him or his staff in 2008. He added:

“I lead from the front: if my people aren’t getting a pay rise, neither will I.”

Despite this Pidgley awarded himself a £31m bonus this month as part of a deal agreed four years ago.

Elsewhere in the tables, Balfour Beatty became the largest construction firm by turnover, overtaking Taylor Wimpey. Balfour reported a turnover of £7.5bn compared with Taylor Wimpey’s £4.7bn. Last year, Taylor Wimpey was ahead by nearly £1bn.

Taylor Wimpey came last in the top 150 by pre-tax profit. The group posted a loss of £19.5m, the result of land writedowns in North America. Persimmon topped the pre-tax profit league with £583m.

Housebuilders’ margins remained strong in the survey period; last year the average was 16.1%, up from 15.9% in 2006. Contractors’ margins hit 3% for the first time in 20 years.