What Price Experience?

A new study from industry analysts Plimsoll Publishing asks how important are the leaders of a company to its financial performance? It suggests that we will soon find out, as one in four of UK Tyre manufacturers and distributors company directors will be aged over 60 by the end of this year and, as they near the end of their careers, who will take over?

The study looked at the top 241 companies in this sector and the 499 company directors responsible for them, examining their age and length of time in office. It assesses how their decisions have influenced the financial performance of the companies for which they are accountable.

Of the 499 directors, 267 (54 per cent) have been in office longer than eight years. If the service criterion is lowered to five years, then 317 directors (64 per cent) qualify. Plimsoll suggests that these directors have had the most influence over the financial performance of their companies and their track record is clearly visible. 30 per cent of the companies run by these directors are placed in a “high financial risk” category in the analysis.

At the other end of the scale, 70 directors (14 per cent) have been in their post for less than two years and 24 of these are working at companies that are “under severe financial pressure”.

Other sections of the analysis look at the influence of a director’s appointment on the performance of the company over the past five years, naming those directors who, since appointment, have either:

· Turned a failing company into a successful one
· Increased the company’s market share
· Improved the profitability

A separate section discusses working past retirement age, noting that there are 64 directors working beyond retirement, 41 per cent of who are running companies rated as “financially strong”.

With the industry poised to lose so many experienced directors, what are the chances of attracting new blood? The Plimsoll analysis comes up with some interesting statistics concerning directors in the UK Tyre manufacturers and distributors industry:

·The average salary is £68,857, which increased by 16 per cent last year

·Top earners can expect a salary around £171,000, compared with a UK average for top earners of £162,000

·The average time in office is just over 10 years, compared to the UK average of eight years.

The 446 page analysis is available in paper format for £305 or electronic format for £499 + VAT. Callers who mention Tyres & Accessories magazine will receive a five per cent discount.