View from City Road: Company losers continue their winning form

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The Independent Online
Losing a job is still as profitable as ever. Two directors of Burton were yesterday revealed to have had payoffs of pounds 850,000 between them last year - not in the same league as Sir Ralph Halpern, the retailer's former boss, but a decent basis for a pension none the less.

Fisons' Cedric Scroggs is expected to collect about half the pounds 750,000 due on his three-year contract, despite the disaster that befell the company on his watch. Shareholders must wonder whether an 18-day payoff would have been more appropriate.

So the catalogue of large payments for poor performance has continued to grow over the past year, from Chris Greentree at Lasmo ( pounds 2.2m) and Peter Scott at Aegis Group ( pounds 2.2m) to Bob Horton at BP ( pounds 1.5m).

At the other end of the spectrum, there is a perfectly reasonable argument in favour of high rewards for top performance, of which this year's most prominent example is Peter Wood of Direct Line, the Royal Bank insurance subsidiary.

The key is to achieve a balance between basic pay and performance-related incentives. Senior executives, and especially the entrepreneurial ones among them, are in a marketplace.

Those who are brought in to turn round a company may often name their own price because of the risk they are taking, and that is the market working. What is much more distasteful is when directors responsible for a company's decline benefit from golden parachutes.

It is time for summaries of directors' contracts to be included in annual reports, rather than be left for inspection by the curious once a year.