Yellow Pages bosses pay rose 70% as it collapsed
Yellow Pages owner Hibu hiked the pay of senior management while the loss-making company was missing loan repayments and heading for collapse
Friday 24 January 2014
The Yellow Pages owner Hibu hiked the pay of senior management by 70 per cent last year while the loss-making company was missing loan repayments and heading for collapse, The Independent can reveal.
Accounts for Yellow Pages Limited, the most important UK subsidiary of the collapsed parent company Hibu plc, show “key management” got £6.5m in salary, short-term benefits and shares in the year to March 2013 – up from £3.8m a year earlier.
The increase came despite Hibu warning in October 2012 it was suspending repayments on its £2bn debt pile and breaching bank covenants in February and March 2013.
Hibu collapsed in July last year, leaving shareholders with nothing.
The revelation about management pay is significant as Hibu failed to give full details about executive pay and bonuses in the final year before its collapse. It did not publish an annual report for the year to March 2013, despite being on the stock market for four more months.
Those close to Hibu insisted the 70 per cent pay increase was not on a “like-for-like” basis, as the number of senior management changed. Although the parent company collapsed, Yellow Pages and other subsidiaries continue to trade as a result of a debt-for-equity swap with lenders.
Angry shareholders have obtained the job contracts for Mike Pocock, the chief executive, and Tony Bates, the chief financial officer. They show that their employment was changed from the parent to a subsidiary, Hibu (UK), in October 2012 – nine months before the parent’s collapse.
Hibu, which was chaired by Bob Wigley, did not dis- close that this change had been made to the stock market.
Barry Dearing, a lawyer for the dissident Hibu Shareholder Group, described the move as “very odd”: “It is my view that the PLC was not disclosing information it should have been, because it was trying to preserve the position as far as the subsidiaries were concerned.”
Those close to Hibu insisted all British employees, and not just the directors, had their employment changed to Hibu (UK) ahead of the restructuring, but there was no obligation to tell the stock market.
The Financial Conduct Authority, which has received calls to investigate Hibu, said stock market rules mean someone “could be paid by a subsidiary but be a director of the parent”.
Hibu Finance (UK), another subsidiary, is due in court in London today to discuss the restructuring. Hibu declined to comment.
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