The chief executive of Southern Cross will not pocket his pay-off of £430,000 when he steps down from the beleaguered care homes operator once its restructuring is "well advanced" towards the end of the autumn.
The company said the decision by Jamie Buchan, who took a 20 per cent pay cut in February, not to accept the payment – equal to 12 months' salary – was consistent with the "tireless and selfless" attitude he has shown at the helm of Southern Cross. Mr Buchan took his role at Southern Cross in January 2009 before the current crisis brought the company to its knees.
The details of him waiving his pay-off came as Southern Cross said it had struck agreements with companies to operate more than 90 per cent of its 752 care homes – with 31,000 residents – although no agreements have yet been finalised.
The UK's biggest care home operator ran into trouble earlier this year, when it started to flounder under the weight of rising rent bills and falling revenues caused, in part, by cash-strapped local authorities reducing their expenditure.
With the threat of administration looming, Southern Cross suffered a precipitous fall in its share price and kicked off restructuring talks with its stakeholders in March.
But landlords had signalled en masse by early July that they wanted to go their own way and in effect end their association with Southern Cross. As a result, the group will be broken up and will now start to transfer over the first wave of properties and employment responsibilities at the end of September.
On 11 July, Mr Buchan said: "It is currently envisaged that the existing group will cease to be an operator of homes at the end of the restructuring period. It is also anticipated that landlords, lenders and, where appropriate, other residual stakeholders will agree the necessary measures to facilitate the orderly closure of the group's affairs and that little or no value will be attributable to shareholders."
On the same day, shares in Southern Cross were suspended.
Christopher Fisher, the chairman of Southern Cross, said: "Jamie Buchan's decision not to take compensation when he steps down as chief executive later in the restructuring process is entirely consistent with the tireless and selfless approach he has adopted while leading the management team at Southern Cross."