High pay increase levels are confined to relatively narrow areas of skill shortages such as the IT sector, despite popular perceptions that double digit growth is normal for managers, according to the Executive Salaries Report in Ireland, published by the Irish Management Institute.

On average, managerial salaries rose by 6.8 per cent between April 1999 and April 2000, the report said.

The consumer price index rise for the nearest comparable period was 4.9 per cent, indicating managerial salary increases are still running ahead of inflation.

In the previous survey year, 1998-99, the salaries increase was 6 per cent compared to a consumer price index rise of 1.4 per cent.

The highest recorded increase was at chief executive level, followed by head of function level.

In a company with a turnover of £250 million (€317.43 million), the upper quartile chief executive salary rose to £159,639 from £156,000, while the median chief executive salary increased from £111,000 to £145,799.

The upper quartile head of function salary in a similar company rose to £93,085 from £80,650 and median head of function salary rose to £75,381 from £65,000.

The report also found that 70 per cent of firms indicated they would increase salaries from April 2000 to April 2001, with most planning an increase of 6.3 per cent to 7 per cent.

Share incentive schemes are gaining in popularity among Irish companies, the report found. Around half of the respondents to the IMI survey said they operated a share incentive scheme, a significant increase on the 40 per cent recorded in 1999.

IMI's chief executive, Mr Barry Kenny, said this year's survey showed a modest real increase in salaries when inflation was taken into account.

He added that companies were managing executive salaries in a responsible way.

"I have no doubt, given our strong economic performance, we can afford this level of increase without affecting our competitive position," he said.