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Thursday, May 6, 1999 Published at 08:29 GMT 09:29 UK

Business: The Economy

Bosses' big pay rise

Boardroom pay is still rising fast

Company bosses received pay rises of twice the rate of inflation last year.

Their pay rose by 6.9%, the second highest figure in the decade, just below 1997's 7.2% increase.

The survey by the Institute of Management shows that those at the top of the corporate tree are doing very nicely, with directors' pay rising by 9%.

Their pay was boosted by bonuses based on share prices, which 70% of the directors now receive.

The figures will add to the controversy about excessive executive pay which is not linked to corporate performance.

Recently Jan Leschly, chief executive of SmithKline Beecham, was forced to defend his 93m remuneration package at the company's AGM.

Set to soar

Mary Chapman, director-general of the Institute of Management, defended performance-related pay and said next year would see bigger increases.

"With confidence now returning and improved performance we can expect to see bonuses rising again and boosting the management pay packet. When pay increases genuinely reflect improvements in company performance it should be seen as a welcome sign of the improving competitiveness of UK plc," she said.

Finance directors were the most highly paid, receiving an average of 108,000.

The average manager was on 36,423 and had worked for the same company for 14 years.

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