View from City Road: McLeod Russell has top pay in its pocket

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The Independent Online
Big companies take note. McLeod Russell is showing them up by taking a firm line with over-generous pay-offs. If a company worth just pounds 58m can do it then so could BP, Lasmo and TSB, all of which have made their former bosses inordinately rich.

The sum involved was pounds 230,000 - not large by the side of some recent payments. Indeed, it was less than a third of 'a McCrickard', the now-established unit of pay-offs named after the departed boss of TSB. By this measure, Bob Horton received two McCrickards and Chris Greentree nearly three.

The pounds 230,000 was promised to Brian Long, the short-serving chief executive of Wheway, the Midlands paint maker which was taken over by McLeod.

His contract stipulated that if the company was taken over, he would be paid two years' salary.

McLeod has forced Mr Long's pay-off down to 'substantially' less than half that which he claimed. In so doing, it has shown the way for other companies that argue pay-offs are contractual obligations and they can do nothing about their size.

For good measure, McLeod also managed to cut Wheway's bills from financial advisers. Just before Christmas, Wheway agreed to pay banks pounds 1m in fees for reorganising its debt. After adding in the costs of defending itself in the bid, the bill left for the new management to pick up was pounds 2.25m. McLeod lopped 25 per cent off that as well.

It would be nice to think that 'doing a McLeod' will be added to 'getting a McCrickard' in City parlance.

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