Lifting the lid on the corporate car park
Lifting the lid on the corporate car park
Keywords Plimsoll, Business analysis, Metal treatments
A study of the 696 directors responsible for the top 203 companies in the UK metal treatments industry has revealed that only 182 directors running 57 companies deserve the accolade of being classed as truly a "top"director. This is according to Plimsoll's new publication: Metal Treatments Top Directors Analysis.
Based on a combined measure of corporate success and staff salaries, the analysis places each of the 203 companies as either rich, fit, fighting or peanuts. Fofty-seven "rich" companies have the right balance of corporate success and staff salaries. Fifty-five "peanut" companies are losing out in corporate success and staff salaries. Forty-one "fighting"companies have yet to see rewards in corporate success despite paying higher than average staff salaries. Thirty-nine "fit" companies pay below average staff salaries, yet are finding success. Eleven were not classed.
The top 182 directors of rich companies have been in office long enough to have a material effect on the financial performance of their companies. Crucially they have been responsible for creating "harmony", in that the company, the directors, the shareholders and the employees are all sharing in the success. These companies are:
growing faster than their peanut counterparts;
making many times the profit over their fighting competitors;
paying over 1.5 per cent of sales on dividends back to shareholders;
paying staff on average £25,000 per year.
For their ability to get results, the directors themselves also benefit in the end. They are rewarded by earning an average of £45,000 a year,although the highest paid directors could see this rise to £105,000. These salary figures are up 4.1 per cent from last year.
From the 196 directors of 55 companies classed as peanuts, 170 directors have held office where their responsibility for these companies is indisputable. These companies are currently "out of tune" and have suffered declines in corporate success. Salaries are also below average for the industry. These companies are:
declining in sales;
making a slim profit, many are loss making;
paying hardly anything back to shareholders;
paying staff on average of £17,000 per year.
In an attempt to turn these peanut companies around, 26 directors have been recently appointed to tackle these problems. Whilst not to blame for the company's current state, they now have some serious decisions to make.
Also named and analysed are the 139 directors of the 39 fit companies. These are successful, growing companies that have below average salaries. One-hundred and forty-six directors in the 41 fighting companies are in the same weak position as the peanut companies, yet arguably they have an added problem in that they are paying above average salaries.
Directors are responsible for the companies they run and as such there should be a quantitative means of measuring their effectiveness on company performance. What this analysis hopes to deliver is hard evidence to evaluate a director's decisions and results, measuring these against their nearest peers.
Lifting the lid on the corporate car park by removing the public image on these companies makes no account of the human and emotional side. In fact, this is precisely the intention of the analysis.
In analysing the 696 directors and their 203 companies in the metal treatments industry through the two-paged graphical Plimsoll Model, the individual strengths and weaknesses of every company are revealed. See for yourself the trend in their performance over the last four years.
To assess the opportunities for yourself, you can order the 556-paged Metal Treatments Top Directors Analysis for £449, including next day delivery, by calling Jennifer Ovington on +44 (0)1642 257800. Readers of this publication will receive a 5 per cent discount if mentioning this article on ordering.
