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Definition
Directors’ remuneration is the aggregate of salary, bonuses, benefits in kind and pension contributions paid to directors. It is disclosed in the accounts and is a business cost, unlike dividends.
In plain terms
It is what directors are paid for working in the business, as opposed to what they take out as owners via dividends. Owner-managers often mix both.
Why it matters for your company
Lenders add back or normalise director pay when assessing true earnings capacity, especially in owner-managed firms. Excessive drawings can weaken affordability. See dividend and EBITDA.
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