The boss of Britain's biggest spread-betting company plans to forgo his impending pay rise despite the company reporting a 30 per cent surge in pre-tax profits before one-offs. IG's chief executive, Tim Howkins, said he would forgo the rise as "it didn't seem right to be taking one at this time".
Pay consultants have recommended pay hikes because they say IG directors' pay has fallen into the fourth quartile when compared to rivals. No details have been given, however.
IG reported profits before one-offs of £126m, although that figure was boosted by an acquisition in Japan and growth was a more modest 25 per cent when this was stripped out. Overall revenues grew by 40 per cent to £257m.
Mr Howkins said that the company had outperformed during the downturn because: "We have a suite of products that are attractive in many situations." People who spread bet typically do well during times of volatility.
The company also has a small sports fixed odds and spread betting business which he said IG plans to retain despite the fact that it accounts for a tiny proportion of the overall business now.
Spread betting – or the similar contracts for difference – is now frequently used by sophisticated investors as an investment tool rather than purely for gambling purposes. Many found themselves in difficulty from the collapse in bank shares last autumn but the firm now has IT systems that will close accounts if money is not paid in when a customer gets wrongfooted by markets, to IG's benefit and theirs.
Mr Howkins, however, said since then IG's clients have done well. "They have been successful, which is really good for us as well. The sort of clients we have are doctors, dentists, people who make decisions. The spread betting product is very appealing to them."