Remuneration special: Age of audacity

The old adage that with age comes wisdom rings as true as ever. According to research by the University of California in San Diego, what is lost in reaction times is made up for in better decision making and greater insight. For finance leaders, particularly those heading the finance function at FTSE-100 companies, there is no substitute for experience.

According to data compiled as part of Financial Director’s 2010 salary survey, some of the most successful and well-remunerated FDs have a wealth of experience behind them.

Well-known finance leaders such as Tim Tookey at Lloyds Banking Group and Malcolm Wyman at SABMiller, aged 68 and 64 respectively, are among some of the best-paid FDs featured in the survey.

Yet a young, hungry and dynamic breed of FD is coming to the fore. Although unlikely to be found at the local skate park, there are FDs of FTSE-100 companies proving that you can reach the top at an ever younger age.

Andrew Griffith, the 39-year-old finance director of BSkyB, Andrew Jenner of services company Serco and Graham Shuttleworth of Randgold Resources – both 41 – have proved age is no barrier to success.

With a salary of just over £1m last year, BSkyB’s Griffith does not fall far short of peers almost 30 years his senior. And he is not alone. According to the survey, Paul Bowtell, the 42-year-old FD of Tui Travel, pulled in a wage of £1.05m.

Mark Freebairn, partner in the CFO practice at headhunter Odgers Berndtson, says age is “completely irrelevant, and has been for quite a while”. In terms of the base salary and short-term benefits, “I don’t care whether you are 39 or 59,” he says. “What you earn will depend on the size and scale of the business.”

Young, gifted and in the black
It is not just the up-and-coming FDs of FTSE-100 companies that can boast such success stories. Finance directors at FTSE-250 companies are also proving they can exceed the remuneration of their elder peers.

Data based on age versus average pay shows that FTSE-250 finance directors aged between 40 and 44 earn an average of £559,470, higher than the average pay of their peers until they reach the age of 60.

According to the survey, FTSE-250 FDs between 45 and 49 earn an average of £549,380; those between 50 and 54 get an average of £506,128; while FDs between 55 and 59 earn an average of £533,716.

It is harder to draw comparisons with the figures for FTSE-100 FDs as BSkyB’s Griffith is the only FTSE-100 FD in his thirties. However, based on his earnings alone, Griffith earns more than the average of FDs until they reach their sixties, exclud­ing those between 45 and 49 years of age.

Neil McConachie, finance director at insurance group Lancashire Holdings and at 37 the third-youngest FD in the survey, agrees that age has become irrelevant.

“It is not that old age is against you but there are certain benefits to being young that may help with the skills a FD needs,” McConachie says.

The remit of finance professionals, both internally for the organisation and as external advisers, has broadened dramatically. The finance function in today’s business environment is no longer comparable with the role only a decade ago.

In a world that is becoming more competitive, complex and regulated, organisations need two types of finance professionals: those who bring deep and specialised finance knowledge to the sector and those who bring a broader commercial experience.