Fatter rewards for directors but thin returns for investors

<i>The Independent</i> publishes its annual survey today measuring the boardroom pay and performance of Britain's largest 100 companies
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Rolf Stahel, the former chief executive of Shire Pharmaceuticals, emerges as the executive with the biggest remuneration relative to the company'sreturns to shareholders.

Rolf Stahel, the former chief executive of Shire Pharmaceuticals, emerges as the executive with the biggest remuneration relative to the company'sreturns to shareholders.

A number of other executives who were found to be poor value for investors in the survey last year have also reappeared in the top 10 this year. They include Sir Christopher Gent, the former chief executive of Vodafone, Jean-Pierre Garnier at GlaxoSmithKline, Lord Browne at BP and Shell's ousted chairman Sir Philip Watts.

In the survey, the two measures of pay - basic salary and pension - as disclosed in the most recent annual report, and shareholder returns over the past three years, have been compared to produce a comprehensive index of value for money. There may be anomalies in this approach, because some companies' shares have been hit by factors outside the control of the chief executive. But by taking a three-year timespan for shareholder return, companies have had a chance to benefit from a period of recovery in the stock market after two bear years.

Rolf Stahel, Shire Pharma;
Pay: £4.7m

Shire's former chief executive ranks as Britain's poorest value executive in the survey versus shareholder return. Mr Stahel was forced out of Shire - a company he built up - after a boardroom dispute. His golden goodbye included a one-off pension contribution of £4.3m.

Michael Bailey, Compass;
Pay: £4.2m

mr bailey catapulted Compass to the world's top catering slot by merging then demerging with Granada. The deal ruined a premium rating the group had for more than a decade. But that didn't stop the chief from doubling his total pay and pension from the previous year.

Sir Christopher Gent, Vodafone;
Pay: £6.2m

After 17 years, Sir Christopher leftthe mobile phone company last July. He oversaw some of its greatest moments and its darkest hours. Through acquisitions he transformed Vodafone into an international giant, but its shares were hit hard when the tech bubble burst in 2000.

Jean-Pierre Garnier, GSK;
Pay: £3.5m

M. Garnier's name became synonymous with the row between shareholders and companies over executive pay last year, when investors voted down his remuneration. This year GSK has tried to bring investors onside with concessions in the way remuneration is awarded.

Ben Verwaayen, BT;
Pay: £2.4m

The Dutchman took over from Sir Peter Bonfield, who topped our list last year. Mr Verwaayen received a golden hello of £1m of BT shares. His basic pay has been frozen ever since, along with other senior executives, as the company struggles to cut its debts.

Lord Browne, BP;
Pay: £4.4m

Britain's best paid oilman's package rose to £4.4m last year. A lifelong employee of BP, Lord Browne has transformed the company into one of the world's top three oil majors. Investorsare also pleased that he has steered clear of the troubles that have engulfed BP'srival, Shell.

Sir Philip Watts, Shell;
Pay: £2.9m

A Bluff businessman, Sir Philip has been in the public eye like no other. He stood down earlier this year when Shell was forced to admit it had massively overstated the amount of oil and gas it said it was producing. Sir Philip is now the subject of multiple investors' lawsuits.

Mike Turner, BAE Systems;
Pay: £2.8m

The straight-talking head of Britain's biggest defence contractor has come under fire this year from some of his board. The company has also been criticised for over-running and over-spending on budgets to build some of the UK's largest defence projects.

Graham Wallace, C&W;
Pay: £2.1m

The chief executive of Cable & Wireless quit after presiding over four profits warnings that saw shares in the company plummet. Mr Wallace, who was at the helm since 1999, was on a controversial two-year contract and spent weeks thrashing out his severance package.

Sir Tom McKillop, AstraZeneca;
Pay: £2.9m

Sir Tom's pay package rose one-fifth last year, despite the fact that shareholders in the pharmaceuticals company have fallen by the same amount since 2001. Sir Tom, who is a trained scientist, is said to be happiest when he is in the laboratory.

* The full survey results are available in today's print edition of The Independent.

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