Scholey's pay down pounds 787,000: Warburg directors refuse performance-related entitlement

SIR DAVID SCHOLEY, chairman of SG Warburg, the London-based investment bank, suffered a pounds 787,000 pay cut last year, reducing his earnings to pounds 411,000, according to the group's accounts, published yesterday.

The highest-paid Warburg director in the year to 31 March received pounds 511,000 compared with last year's highest earner, who made pounds 1.03m.

The huge falls were due to Sir David and various fellow directors choosing to forgo payments from Warburg's famously generous long- term performance-related pay scheme, which is linked to the group's share price.

In contrast, top pay at Mercury Asset Management, Warburg's 70 per cent-owned fund management subsidiary, edged ahead, with the highest earner receiving pounds 630,000 against pounds 610,000 last year.

A Warburg spokesman stressed that directors' pay had to be seen in the context of a long-term performance-related pay deal that involved the individual director deciding when he wanted to take his payments.

Sir David, for instance, received the same salary and benefits as last year, pounds 195,000, and annual performance-related pay of pounds 216,000, down from pounds 316,000 in 1992.

The annual component was decided by the group's senior appointments and compensation committee. This year Sir David opted to take no long-term performance-related pay at all, compared with pounds 687,000 in 1992.

Warburg last week announced annual pre-tax profits down 11 per cent at pounds 148.2m, whereas Mercury's profits rose 26 per cent to pounds 82.3m and its funds under management grew by almost a quarter to pounds 49.7bn.

A Warburg spokesman said that as far as the top Mercury earner was concerned: 'MAM had a good year and we have to pay competitively for our people.'

Warburg previously courted controversy over pay in 1986-87 when Peter Stormonth Darling, then chairman of MAM, was paid pounds 1.05m.