Executive pay in the hospitality and leisure sector has rocketed over the past five years, outstripping average company profit growth and ordinary employees' pay, according to a new report.
The highest paid executive listed in the survey was David Michels, former chief executive of the Hilton Group. His total income soared by 201% from £826,000 in 2002 to £2.5m in 2005. Company profits grew by 152% to £394m over the same period.
Millennium & Copthorne‘s chief executive Tony Potter saw his total remuneration grow by 15% to £713,000 over the same period, even though group profits fell by 8% to £55m.
The survey found that the average salary for a hospitality and leisure employee grew by 35% between 2000 and 2005, from £13,410 to £18,062. The average chief executive's salary rose by 33% from £375,919 to £501,613 over the same period. However, the average total earnings for chief executives has grown by 42% to £1.07m, up from £752,754 in 2002.
As a result, eight (or 40%) out of 20 chief executives surveyed took home more than £1m in 2005 compared with just three (or 20%) in 2002.
Other chief executives earning more than £1m last year included Andrew Cosslett of InterContinental Hotels & Resorts (£1.25m), Enterprise Inns‘ Ted Tuppen (£1.1m), Mike Bailey at Compass (£1.1m), Whitbread‘s Alan Parker (£1.07m) and Rank's Ian Burke (£1.04m).
\* Pay for Performance 2006 is on sale for £235. Visit www.janetsalmon.com for further details.
Chief executives' total earnings and company profits 2002-05
|Company||Profit £m2005||Profit £m 2002||Chief exec total earnings 2005||Chief exec total earnings 2002|
** £206.4m in discontinued operations and restructuring*
By Angela Frewin