Simon English: Tim Breedon may have earned his £3m L&G payoff, but it's still a huge amount

 

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The Independent Online

Outlook Tim Breedon can skip out of Legal & General (L&G) at the end of this year with two valuable things: vindication and three million quid. Both are nice, but if asked to choose, you might settle for the latter.

As chief executive, Mr Breedon led the insurer through one of the trickiest periods in its history. It endured a financial crisis that had large chunks of the City openly betting on the company's eventual collapse.

The concern, post-Lehman Brothers, was L&G was funding its very large annuity book with bonds – in particular bank bonds – which seemed likely to default. So the argument went.

Mr Breedon insisted the City scribblers and speculators were just plain wrong, that the portfolio was much lower risk than they understood, that L&G was strong.

He turned out to be right. And they turned out not to know the difference between their elbows and a hole in the ground.

And that £3m – it might go up or down a bit by the time he collects – has been built up over quite a few years. It isn't a reward for failure or compensation for loss of office, he earned it.

Still, it remains the case that such sums look like (and indeed are) huge amounts as far as the general public is concerned.

It's very hard for L&G to make a meaningful stand as an investor on excess executive pay in other boardrooms for as long as such rewards are commonplace in-house.

s.english@independent.co.uk

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