THE REMUNERATION OF NON-OWNER MANAGERS IN SMALL AND MEDIUM-SIZED UK ENTERPRISES

Virtually all prior research on small and medium sized enterprise (SME ) management has focused on owner managers. This article, however, emp irically examines the determinants of managerial remuneration for a sa mple of 97 UK SME non-owning managerial employees. The empirical analy sis, based upon data obtained from interviews with middle (i.e. non-di rector level) managers and the published financial records of their em ploying firms lodged at Companies House, first examines the influence of firm size and performance and then augments the empirical model to include pay composition, industrial sector, external labour market and human capital variables. The empirical results indicate that the aver age profitability of the employing firms is not a significant determin ant of managerial remuneration. However, composition of pay appears to have a significant effect upon total remuneration since, even after c ontrolling for other influences, managers in receipt of annual bonuses and/or profit-sharing bonuses are estimated to earn an additional 6,6 00 Pound. The managers' age and qualifications, and the asset size, in dustry and location of their employing firms are also significant fact ors and collectively are able to explain a large proportion of the cro ss-sectional variance in remuneration. Though there is a lack of previ ous empirical research on SME managerial pay, these results are broadl y consistent with the expectations derived from the extant theoretical and empirical literatures on managerial remuneration.