Ousted Stagecoach chief got £70,000 rise while profits sank

Keith Cochrane, the former chief executive of Stagecoach, received a £70,000 pay rise last year even though the bus and rail group's profits fell by 16 per cent and its share price fell by two-thirds.

Mr Cochrane, who was ousted last month after a third profit warning within 12 months, saw his remuneration rise 13 per cent from £453,000 in 2000-01 to £522,000.

Stagecoach's annual report and accounts show that the main reason for the pay rise was a £35,000 increase in Mr Cochrane's annual performance bonus to £85,000.

Mr Cochrane's resignation was accompanied by a one-third cut in the dividend, a fresh profits warning and an admission that the group may be forced to sell its troubled North American business Coach USA.

He was on a one-year contract and is expected to receive a pay-off worth about £500,000. Mr Cochrane also had 1.4 million share options but these are worthless because of the collapse in Stagecoach's shares.

Last month's profits warning drove the Stagecoach share price down by 27 per cent. The shares now stand at 34.5p – just 3p above their all-time low – valuing Stagecoach at £452m. A year ago the shares were worth 90p. At its all-time peak, Stagecoach was valued at £3.8bn.

Stagecoach's founder and chairman, Brian Souter, saw his pay fall last year from £498,000 to £465,000. However, his remuneration is likely to rise this year because he has stepped into the temporary role of acting chief executive while a replacement for Mr Cochrane is sought. Robert Speirs has become acting non-executive chairman in the meantime.

Coach USA cost the group £1.2bn, but a year ago its value was written down by £376m.