Rail crash firm lambasted by ABI as chief executive quits

Kevin Hyde quit as the chief executive of Jarvis yesterday after overseeing a disastrous 16 months at the company during which it made a £244m loss, breached its banking covenants and saw its share price collapse.

Kevin Hyde quit as the chief executive of Jarvis yesterday after overseeing a disastrous 16 months at the company during which it made a £244m loss, breached its banking covenants and saw its share price collapse.

He said: "I believe that this is an appropriate moment for me to step down, having set in hand urgent actions necessary for recovery following the extremely difficult trading conditions we suffered in the last financial year. Now the situation is more stable, the group will benefit from fresh insights."

He will receive a 12-month pay-off of nearly £400,000 for leaving in a year when Jarvis racked up the loss. Mr Hyde joined Jarvis in 2000, becoming operations director in 2001 and taking over the top job from Paris Moayedi in May 2003. During the period, Jarvis found itself at the centre of a number of rail accidents and became overwhelmed by its £230m of debts. Earlier this year Mr Hyde had to re-negotiate an extension of the company's banking facilities, as well as announce a major asset sale, to keep the company afloat. Its construction projects have been dogged by catalogues of errors and delays, and it has lost one major schools project on account of its financial difficulties. Network Rail, the track infrastructure body, withdrew rail maintenance contracts from Jarvis and the company's shares have plummeted from 332p at that time to a low of 23p.

News of Mr Hyde's departure came as shareholders were already preparing for a revolt on performance bonuses paid to a number of former directors for the year of the Potters Bar rail crash. The Association of British Insurers (ABI), yesterday issued a "red top" warning against the payment of £470,000 to directors who were in charge at the time of the crash that killed seven people. This is the most serious warning the ABI gives to its members and many are expected to vote against the remuneration report at the annual meeting.

The bonuses were deferred from 2003 after the Potters Bar crash. But Mr Moayedi, who left in November 2003, has since been awarded £260,000 on top of his pay-off on leaving the company of about £600,000. Andrew Sutton and Tony Cunningham, who both left earlier in the year, were also paid deferred bonuses of £210,000 between them on top of severance packages. A spokeswoman for the ABI said "We have serious concerns because the company is not paying on the basis of performance." The ABI also criticised the company's internal controls, saying the quality of the information that its pay committee passed to its board was inadequate and insufficiently objective. Mr Hyde also received a £137,000 deferred bonus from 2002/03.