BAe pays out pounds 2m in handshakes and hellos

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The Independent Online
BRITISH AEROSPACE, which last year recorded the biggest loss in British corporate history, paid out pounds 2m last year in golden handshakes to former directors and golden hellos to its new top management team.

The salary for the chairmanship, now occupied by John Cahill, rose by 48 per cent to pounds 440,000 while the new finance director, Richard Lapthorne, became BAe's highest-paid director on pounds 406,191. The company lost pounds 1.2bn last year.

Meanwhile Bob Bauman, chief executive of the drug company SmithKline Beecham, who has come under fire from shareholders for the size of his salary, boosted his basic pay by more than 20 per cent to more than pounds 1.6m last year.

The rival company Wellcome revealed that its highest-paid director - understood to be the chief executive, John Robb - increased his pay, including performance-related benefits, by more than 52 per cent last year, to pounds 590,000.

According to BAe's annual report and accounts, released yesterday, pay-offs totalling pounds 552,643 were made to four former directors, one of whom also received pounds 452,400 in the form of a pension top- up. The directors who left were Dudley Eustace, finance director, Brian Cookson, legal director, Frank Saundry, personnel director, and Raymond Mould, chairman of BAe's property subsidiary, Arlington Securities.

Mr Lapthorne's pay includes a hefty golden hello payment of about pounds 250,000 in compensation for pension rights he gave up at Courtaulds.

Mr Cahill, who took over as chairman from Sir Graham Day part-way through the year, received pounds 360,645 from his appointment in May to the end of the year. Together with the pounds 78,673 paid to Sir Graham between January and May, this took the total pay for the BAe chairmanship last year to pounds 439,318, compared with pounds 297,703 in 1991.

Professor Sir Roland Smith, who left as chairman in October 1991 in the wake of the debacle over the fumbled profits warning and rights issue that began BAe's descent, also received pounds 300,000 last year. His contract entitled him to be paid up until May this year.

The pay of Dick Evans, BAe's chief executive, was frozen last year at pounds 338,110. The salaries of all other BAe executives and management grades has been frozen for two years running.

A spokesman said Mr Cahill and Mr Lapthorne had been recruited to achieve specific goals at BAe. 'Obviously, there was a price attached to bringing these people on board.'

SmithKline's annual report shows that Mr Bauman's basic salary and benefits rose to pounds 1.02m from pounds 904,000 in 1991, while his bonus jumped to pounds 571,000 from pounds 422,000.