Wrist-slapping time at Kingfisher

Sir Geoffrey Mulcahy, Kingfisher's chief executive, earned enough last year for a few thousand pounds worth of tax advice fees to be about as much of a financial burden as a few extra dinners out. Like many directors of large, publicly quoted companies, he has access to a wide range of perks in addition to a large salary, options and bonuses. There is nothing intrinsically wrong with perks, be they school fees, company cars, cheap loans or gold club memberships.This is the way companies have always worked, and there is no reason to change it. Why should payment in kind be abolished out of a puritan sense of properness, as long as the real value of the concession is declared as remuneration?

In Sir Geoffrey's case, (and that of his co-director Nigel Whittaker) this is the problem. The amount in question, £4,000 a year, is small, at least in comparison with a £1.3m pay package for Sir Geoffrey last year. The company says it was "a mistake" not to disclose the payments to shareholders. Given that the payments began in 1983, this means that Kingfisher has been making the same mistake annually for 11 years. Is this failure to include the perk in the director's remuneration note in the annual report more than a wrist-slapping offence?

At the moment institutional investors are turning a blind eye. They cannot afford to rock the boat further at a company that has already thrown its chief executive and finance director overboard in the past two weeks and which would almost certainly havegreat difficulty finding a replacement for Sir Geoffrey - indeed, a shortage of candidates may well be why he was kept on and given another chance to prove himself. To lob another director (or two) into the heaving sea would leave Kingfisher looking even more like a rudderless ship than it does already.For the time being, then, Sir Geoffrey, has a dispensation from shareholders to get on with running the shop. But in the longer term this little spat over undeclared remuneration could tip the balance against him. People have lost their jobs for less.

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