Employment and Financial year Remuneration
While there is a general upward trend in dividends, particularly for larger businesses, smaller businesses have seen flat or declining dividends being paid out.
Outgoing dividends have fluctuated across business size. While there is a general upward trend in dividends, particularly for £200m+ businesses, smaller businesses have seen flatter or declining dividends being paid out. In particular, companies between £5-10m saw a massive 85.6% decrease in dividend pay outs in 2018/19 following a big jump of nearly 250% the previous year. Larger businesses over £200m saw a 60% increase in dividends from 2017/18 to 2018/19, following a jump of 17.1% from 2016/17 to 2018/19.
Number of Employees
These figures seem fairly flat, but they mask the disruption at the higher end of the market. Overall, the employee numbers were steady for companies under the £200m turnover size, but we can see a large decrease in employee numbers for companies over £200m turnover from 878 to 777 on average. As they are showing significant decreases in turnover, a reduced headcount is expected. Our statistics for the total figures show employee numbers moving from 237,486 in 2017/18 to 241,766 in 2018/19; in other words, very little change. It would appear that the cutbacks by £200m+ corporates have been filled by the other groups. Interestingly, there appears no apparent material increase in employment numbers with the new renumeration rules coming into effect 1 April 2020, which HMRC will be anticipating.
Almost all groups increased directors’ remuneration year on year. The £25-100m bracket had the largest increase of almost 200K. The groups have increased year on year with the exception of £100-150m and £150-200m which remained stable. It is surprising to see that despite the static profits companies haven’t cutback on directors’ remuneration pay.
Highest Paid Director
There is obviously a clear relationship between directors’ remuneration and highest paid director. All remuneration is in line with the average financial performance of the companies within each turnover bracket. Remuneration to directors can fluctuate due to performance of the company and personal needs of its owners. However, it is fair to say the general increase in the total directors’ remunerationhas seen the corresponding increase in the pay of the highest paid director.
Please read the full report here: 2019 MHA UK Construction Sector Report
If you would like to discuss any of the issues raised in more detail or if you would like to speak with a member of our Construction & Real Estate team about how we can help, please contact Hannah Farmborough or call on 0207 429 4147 to be put in contact with your local representative.