Boss at scandal-struck G4S gets £1.5m for eight months’ work
Tuesday 15 April 2014
The chief executive of the scandal-hit security giant G4S has been handed a £1.46m pay and perks package for just eight months’ work, it was revealed yesterday.
Ashley Almanza became chief executive in June after joining the group just a month earlier as chief financial officer.
His pay and bonus package will astound investors, who have seen the shares fall 20 per cent since April last year after the group was mired in a series of security scandals including its London Olympics fiasco. It is now facing a criminal investigation by the UK’s Serious Fraud Office.
Mr Almanza has been paid a £648,000 bonus – the maximum allowed – on top of a basic annual salary, plus other benefits and a pension contribution, even though the group revealed last month that it had plunged £342m into the red at its full-year results.
The tumbling profit was due to costs and charges relating to a higher-than-expected £109m penalty for overcharging on criminal tagging contracts with the Ministry of Justice.
G4S had been barred from winning other central government contracts, but after settling the repayments it will now bid for work again. Its repayments to the Government were far larger than those of its rival Serco, which was also found to have overcharged on certain outsourcing contracts. It was revealed that G4S and Serco had been charging the Ministry of Justice for tagging criminals who were dead or in prison.
The problems at G4S have not been restricted to the UK. Earlier this year it lost a £50m deal to manage Australia’s Manus Island asylum facility, off the coast of Papua New Guinea, because of a human rights scandal.
Mr Almanza replaced Nick Buckles, who left in May last year after continued criticism of the way the group bungled security at the Olympic Games. Mr Buckles received a much-criticised £1.2m payoff when he left.
In the annual report Mark Elliot, the company’s chairman, admitted that 2013 had been a “year of great change for the group”. He defended payments to Mr Buckles and to the former chief financial officer, Trevor Dighton, as payments that “simply reflected their contractual entitlements”, adding that “there were no additional payments nor was there any accelerated vesting of outstanding awards”.
Mr Elliott also argued that Mr Almanza’s pay package and bonus is “in recognition of … significant business achievements”, as he was asked to “focus on identifying root causes of issues that had led to our profit warning in May and to prioritise the correction of those issues in a sustainable manner”.
The 2013 annual report revealed that Mr Almanza had received a pay rise in 2014 and his basic salary is now £890,000 a year.
Last week analysts at HSBC downgraded the group to “underweight” – a sell – because they thought that investors were overestimating a potential recovery in its developed markets such as the UK.
The company’s shares have recently recovered from a March low of 228p and closed up 1.6p to 248p yesterday.
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