Ex-BTR chief earns pounds 1m for three months

Click to follow
The Independent Online
BTR paid its former chief executive, Alan Jackson, almost pounds 1m in 1996, a year in which he served as an executive director for only three months, the company's profits fell by 13 per cent, the dividend was cut by 35 per cent and its shares underperformed the market by more than 20 per cent.

The company's annual report, which was sent to shareholders yesterday, shows a total remuneration of pounds 949,116 for Mr Jackson, a 40 per cent increase on his salary in 1995, his last year as chief executive of the industrial group. Having resigned as chief executive at the end of 1995, Mr Jackson continued as an executive until the end of March before seeing out the rest of the year as a non-executive director.

Mr Jackson's remuneration last year included "sums to discharge contractual obligations" at the end of his contract, according to the report.

A spokesman said those obligations were "in connection with untaken long-service leave under the state of Victoria employment legislation, together with holiday untaken and paid in lieu". Mr Jackson, an Australian, has left BTR to concentrate on his other business interests.

His end-of-career bonanza is certain to provoke questions at BTR's annual meeting on 8 May, coming as it does at the end of a four-year period in which BTR's shares have fallen from a high of 407p to last night's close of 249p.

The underperformance of BTR's shares during the last three year's of Mr Jackson's tenure has continued under Ian Strachan, his successor, who last year enjoyed a total pay package worth pounds 738,774.

BTR's munificence towards its directors resulted in a total boardroom pay bill of pounds 4.7m last year after a 16 per cent hike in salaries and benefits.

Elwyn Eilledge, chairman, took home pounds 152,358 in the seven and a half months since he took over from Norman Ireland. Finance director Kathy O'Donovan's pay jumped from pounds 288,251 in 1995 to pounds 349,507.

It has become fairly common for some large companies to continue paying directors handsome salaries after their retirement. In 1996, SmithKline Beecham paid former directors pounds 4.9m, almost as much as the pounds 7m it gave to its current board. In the 16 months to December 1995, Glaxo Wellcome paid its former chief executive Ernest Mario pounds 2.1m followed by another pounds 460,000 payment last year.

The disparity between pay and performance is particularly marked at BTR where the company has struggled to persuade shareholders of the merits of a corporate restructuring announced last September, involving the disposal of businesses accounting for 25 per cent of the group's turnover.

A pounds 622m provision to pay for the restructuring wiped out interim profits and accompanied a slashing of the dividend, the payment of which had become a sacred cow under BTR's old guard.