Diageo chief pockets £6m

Paul Walsh, the chief executive of the world's biggest spirits group Diageo, saw his annual pay packet jump 72 per cent to more than £6m last year despite sluggish sales and profits growth at the world's biggest spirits group.

Mr Walsh, who has led the Smirnoff vodka and Johnnie Walker whisky maker for the past 10 years, saw his base salary frozen at £1.16m in response to economic conditions, according to Diageo's annual report yesterday.

However, he was paid £1.98m under an annual incentive plan based on profits, net sales and free cash flow, which with other benefits saw his annual salary rise to £3.18m from £1.71m the previous year.

Under a long-term incentive plan, Mr Walsh also received payments and made gains of £2.86m, making his total pay packet £6.04m, up from £3.50m previously. He received nearly half a million share options, which are due to vest 2012.

Another long-term performance-related share award, which was due to vest in September, lapsed, however, after failing to meet the performance targets set against peers.

In late August, Diageo said underlying sales and profits both rose just 2 per cent in its year to the end of June 2010 amid weak demand in North America and Europe. Its shares, however, rose by about a fifth in the year and Diageo raised its final dividend payout by 6 per cent.