Company secretaries are among the highest-paid executives in the UK
It’s a tough job and getting tougher. Regulatory compliance in the UK is becoming ever more complex, particularly under the recently revised Combined Code on corporate governance. Job opportunities are narrowing as mergers eliminate senior secretariat positions. Hours are long, pension coverage is short and an army of interim secretaries is invading the workplace. By all accounts, being a chartered company secretary in Britain is hardly a stroll in Hyde Park. But who’s complaining?
Far from grumbling, company secretaries in the UK are delighted to be where they are – long hours and increased job complexity notwithstanding. They are satisfied with their jobs, believe their positions are reasonably secure and expect their internal visibility to rise steadily as companies focus more and more on governance issues. In short, says Dave Belmont, group company secretary of British IT software and services company CODASciSys, ‘corporate secretaries are doing a good job and they’re enjoying it.’
Of course, there’s also a more tangible reason for all the happiness. Company secretaries are among the highest-paid professionals in Britain, according to two recent surveys. One is a large-scale government poll called the Annual Survey of Hours and Earnings (ASHE), released in August. The other is a more limited sampling of about 250 companies by Corporate Secretarial Services (CSS), a recruitment consultancy based in London.
The ASHE survey shows that financial managers and chartered secretaries rank fourth in salary among 340 different job categories (see table, ‘Show me the money,’ page 23). The average base salary for financial managers and chartered secretaries was £79,545 (about $150,000) in 2005, up 10.3 percent from 2004, according to ASHE. This puts company secretaries’ salaries behind those of CEOs of major organizations, doctors and brokers – and ahead of just about everyone else.
Follow the money
The ASHE survey clearly shows that compensation for corporate secretariat staff in the UK is rising faster than the national trend. For example, while the 10.3 percent pay increase for chartered secretaries and financial managers is less dramatic than that of doctors and brokers (20.4 percent and 24.8 percent, respectively), it is considerably higher than the nationwide average of 4.5 percent for all occupations.
To some extent, the ASHE ranking is skewed by the fact that company secretaries are lumped together with financial managers, notes Jackie Fox, company secretary of CCLA Investment Management, a provider of investment and property management services. Financial managers, particularly those with knowledge of the Financial Services Authority’s regulations, ‘are earning a fortune right now’ due to changing rules, Fox says. If company secretaries were considered separately, they would probably rank tenth rather than fourth on the ASHE table, she estimates.
Interestingly, salaries of chartered secretaries and financial managers are well above those in a job category ASHE calls ‘solicitors, lawyers, judges and coroners’ (£51,579, or about $97,484) and ‘chartered and certified accountants’ (£39,666, or about $74,969). Lawyers and coroners rank eighth on the ASHE list of 340 occupations, while accountants are 31st.
The CSS survey, meanwhile, shows that the average 2005 base salary of company secretaries ranged from £141,000 (about $266,000) at FTSE 100 companies to £76,000 ($144,000) at small, unlisted firms (see table, ‘Climbing the ladder,’ page 25). Average salaries for deputy company secretaries ranged from £91,000 ($172,000) among the FTSE 100 to £53,000 ($100,000) at small firms. Note that salaries averaged in the CSS survey may be higher than those reported in the ASHE poll because the CSS research concentrated on the higher-income region of London and the southeast portion of the country.
Closing the gap
The ASHE poll prompted renewed angst in Britain over the growing gap between rich and poor. But within the world of company secretariat staffs, at least, the gap is narrowing, according to CSS. ‘Smaller companies are quickly closing the gap between themselves and the FTSE 350,’ says Caroline Evans, director of CSS and author of the survey. ‘Smaller companies have done relatively well economically, and this is reflected in the salaries of headquarters staff, including the secretariats.’
In particular, base salaries for company secretaries at companies smaller than the FTSE 350 rose 12 percent between 2004 and 2005, and salaries at unlisted firms climbed 16 percent, while pay increases in the bigger firms were smaller in percentage terms, Evans explains. CSS has been carrying out annual or biannual salary surveys of company secretaries for about 15 years.
The CSS survey, which was supplemented by information from the firm’s client database, also shows that company secretaries received above-average fringe benefits. About 75 percent are covered by pension plans, 62 percent receive private health insurance to supplement public health coverage and 41 percent benefit from share options. There are also company cars (38 percent) and other perks such as mortgage subsidies, gym memberships and support for further professional training.
UK companies are increasingly offering performance-based bonuses as part of compensation packages. For high earners – those with base salaries of £100,000 and above – bonuses can be as high as 46 percent of total pay, according to the CSS survey. Those in the £60,000-100,000 salary range report that bonuses make up about 30 percent of pay, while those earning less than £60,000 say bonuses comprise 13 percent.
It’s not all sunny
Despite relatively high pay and generous fringe benefits, there remain pockets of anxiety among company secretariats, according to the CSS survey. Some secretaries and their staffs see shrinking opportunities due to a spate of takeovers of UK firms, making some staff superfluous.
‘The situation is exacerbated when a UK-quoted company is taken over by an overseas entity and subsequently delisted, thereby simplifying secretariat operations here,’ says Evans. ‘This has increased the candidate pool, creating a more employer-driven market.’
In the CSS survey, nearly half (47 percent) of respondents see their own promotion prospects as poor or extremely poor – either because of market conditions or because they’ve already reached the top job at their companies and have no further room to grow. Another 25 percent see their promotion prospects as only ‘fair.’
Not everyone agrees with this assessment, however. ‘The CSS survey results show that perception of job security is high; about 50 percent rate their job security as good and another 18 percent say it is extremely good,’ notes Belmont. ‘That does not quite square-up with a finding of jobs being lost due to takeovers.’
‘There may be some redundancies as a result of takeovers, but there are also increases in demand for corporate secretaries for other reasons,’ adds Suzanne Dobson, deputy director of policy development of the London-based Institute of Chartered Secretaries and Administrators (ICSA). ‘I don’t recognize the pessimism about redundancies as a result of mergers. There have been very few takeovers that have led to any of our members being made redundant.’
‘There is quite a lot of demand for company secretaries,’ agrees Fox. Current drivers of that demand are the revisions in the Combined Code reporting requirements, the adoption of best practices in corporate governance and the company law reform bill, which is ‘on the way,’ she says.
Company secretaries’ perception of job security may be somewhat lower now than in the past because of changing norms in corporations. ‘Years ago, when a company secretary joined a company, he or she stayed a long time,’ notes Fox. ‘Now, many companies do periodic personnel reviews, and company secretaries are not excluded from those reviews. So it is more common for a company secretary to change jobs every three or four years than it used to be.’
While there may be an increase in demand for corporate secretarial services, there is not always a commensurate increase in budget for additional staff, says Evans. The result is a longer workday. In the CSS survey, 39 percent expect increased requirements outside normal working hours, and 58 percent expect such demands to stay the same. That’s no different from many other jobs. ‘People in all professional disciplines accept longer hours due to a tough employment climate,’ Evans says.
Moreover, secretariat staffs expect to work more years than they initially planned, since existing pension plans will likely fall short of requirements. Only a few company secretaries have defined-benefit pension plans. Those with company pension plans – about 75 percent of respondents to the CSS survey – tend to have defined-contribution schemes, which can carry greater risks for beneficiaries.
One result of increased workloads is a greater use of interim corporate secretarial staff. The number of businesses hiring interim secretariat staff rose 37 percent between 2004 and 2005, according to CSS. This is driven by a combination of corporate efforts to reduce headcount and rising demand for special skills, such as familiarity with Sarbanes-Oxley requirements. Some firms hire temporary corporate secretaries to try them out before hiring them on a permanent basis.
Rising stars
The growing complexity of secretariat jobs does have a positive side, notes Dobson. ‘In terms of the breadth of the work involved, the company secretary has the best job in the entire organization. Nothing goes down without the secretariat knowing about it. If the company is about to merge, buy new premises or make any other major move, the implementation has to go through the secretariat.’
This observation is backed by the results of the CSS survey. Two thirds (66 percent) of respondents say their job satisfaction level is either good or extremely good, and another 21 percent say it is ‘fair.’
‘Being in a job where the vast majority enjoy what they do is pretty good,’ says Belmont. ‘I have teenagers who say, I don’t want to do Dad’s boring job.’ Now I can show them this result, which says a lot about the nature of the work and the variety that the job offers.’
‘There is an increased focus on corporate governance, and this has brought the function of the secretariat to the fore,’ says Evans. ‘Getting it right on the corporate governance side has meant that organizations have invested in their secretariats and have made the role less administrative and more policy-oriented.’
And the future of the field? ‘There are more people wanting to move into the field,’ Evans concludes. ‘In particular, more and more law graduates are looking at this role. There are plenty of reasons to feel positive about the long-term future of the discipline.’
