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What Is Managerial Remuneration?

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  • Written By: Mary McMahon
  • Edited By: Shereen Skola
  • Last Modified Date: 08 April 2014
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Managerial remuneration is compensation for services provided to a company in a managerial capacity. This can include cash payments, along with benefits like stock options, health insurance, and bonuses. Managers are typically paid more than the people they supervise, although they tend to make less than the executives at the head of the company. Some pay structures are transparent, making it easy to determine how much money managers make, while others may be confidential.

People in management usually sign employment contracts with the terms of their employment clearly outlined, and these contracts can include a discussion of remuneration. A salary or hourly wage can be part of the compensation package along with any benefits. Performance-linked benefits are common for managers, to encourage them to up efficiency and production. People may get extra payments for meeting production targets, for example, or could receive a bonus based on overall company profits for the year.

As managers rise in the ranks and acquire seniority, their pay can increase. Publicly traded companies and government agencies may be subject to caps on managerial remuneration, and these stipulations ensure that employees do not receive unreasonable compensation for working in management positions. They can be applied by legislation or through shareholder votes, in the case of a public company. Shareholders might, for example, decide to cut paid vacation benefits or payments to life insurance policies.

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At government agencies, there are typically employment tables that separate people by rank. Remuneration is held at the same amount in each rank, and ranks can be determined by seniority and qualifications. This creates a transparent compensation system where people know how much everyone makes, or can find out with some research. By contrast, at private companies, this information may be private, and in some cases is specifically confidential; managers may not be allowed to share salary information.

Members of the public and job seekers can take advantage of charts to learn more about managerial remuneration. These rely on sources like censuses and surveys to determine average wages in various industries. This information can be helpful for people negotiating wages, as they may be able to argue that a package is very low for a given industry and region on the basis of average wage data. Such charts can also be useful for shareholders making decisions about remuneration, as they typically want to keep compensation competitive to attract talent without offering excessive payment.

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