James Moore: How long can Petrofac justify Asfari's 'perk'?

Outlook In investment terms, the Petrofac train has hit the buffers. Yesterday there was more pain, after the oil services group warned that growth in a key division would be only modest.

The same goes for earnings. The fanfare made over the fact that a key project in Algeria is set to be cranked up again after being impeded by terrorism failed to temper the slide, and indeed the shares are down by 25 per cent this year. The company's chief executive, Ayman Asfari, still reckons he can double earnings by 2015, but the near-term outlook is cloudy and the second half of the year, when things are supposed to pick up, will need to be exceptional if this falling star is to regain its position in the sky. For the past couple of years I've highlighted the small matter of the boss's private jet – to be technically correct, the plane is owned by an offshore trust in which he has a beneficial interest – which shareholders kick in a million a year to keep flying.

The standard response from the company's spokesmen is that Petrofac pays less than market rates for this (although no comparison has ever been provided) and that the company has done jolly well for investors. The latter doesn't justify something that looks questionable at best on governance grounds (Pirc has raised it as an issue) because it isn't really the point.

If this is genuinely a good deal for shareholders and not just (ahem) a perk, the company should provide more detail than just an obscure note in the bowels of the annual report. Given the shares' slide, the false argument that "exceptional performance" somehow makes it all ok won't be available next year.