Manweb criticised for rolling contract

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The Independent Online
Manweb, the regional electricity distributor, came under fire yesterday from shareholder groups over its recruitment of its new finance director, Stuart Siddall, on a three-year rolling contract.

Three-year rolling contracts have been increasingly attacked in recent months because they result in large pay-offs to sacked directors.

John Rogers, secretary of the National Association of Pension Funds investment committee, said: "There does seem to be a forming consensus that contracts should not be greater than one year. The company will have to expect that some of our members will raise the issue of this new contract with them."

The NAPF issued a briefing paper in December, called Directors Service Contracts, which said that initial contracts of three years are acceptable if they are fixed, and then after the initial three years they should become one-year rolling contracts. Mr Rogers added: "A concern with rolling contracts is that they just roll on and remuneration committees don't review them."

A spokesman for the Institute of Directors said: "We don't comment on particular cases." He did, however, draw attention to guidelines issued by the IoD in January. These state that directors' contracts should be no longer than two years, whether fixed or rolling.

Mr Siddall, who comes from Balfour Beatty, the BICC subsidiary, will take up his new post as finance director in April. He is a replacement for John Astall, who left the company abruptly in late October.

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