SCOTLAND’S corporate accounting elite enjoyed an average increase in pay and bonuses of 26% in the last financial year – despite plummeting share prices. However, figures disclosed in a new survey ofthe FTSE-250 are distorted by the rises handed to the finance directors of Royal Bank of Scotland and Scottish Power, who enjoyed the second and third-highest pay rises in the FTSE-100.
Only Helen Weir of Kingfisher enjoyed a bigger rise than the 98% increase awarded to David Nish of ScottishPower and the 97% hike for Fred Watt of Royal Bank. If Nish and Watt are excluded from the (pounds) 100m-plus market value bracket, the average rise among Scottish-based plcs was 11%.
Figures compiled by Financial Director magazine and The Herald show that, unsurprisingly, Watt is way out in front among large Scots-based plcs.
An alumnus of Allan Glen’s School in Glasgow, Watt won his spurs by successfully integrating big acquisitions at conglomerate Wassall, a skill he has exploited to the full since joining Royal Bank in 2000.
Last year, Watt’s basic salary of (pounds) 466,000 was supplemented by performance bonus of (pounds) 966,000 and other benefits – taking his total package to (pounds) 1.53m. Only Peter Clarke at hedge fund operator Man Group earned more.
Watt, a chartered accountant, could lay claim to the accolade of Scotland’s highest-paid accountant were it not for the fact that former Touche Ross partner Fred Goodwin is his superior. One consolation for Watt is that he now earns about the same as PricewaterhouseCoopers’ UK chief Kieran Poynter, Britain’s highest- paid practising accountant.
Boardroom pay hikes at Royal Bank passed off uncontroversially amid the general rumpus over fat-cat pay, reflecting the company’s bullish performance. However, other companies, including ScottishPower and Stagecoach, suffered a barrage of investor flak. At the energy utility, some 15% of shareholders voted against or abstained over the company’s remuneration report, which revealed that Nish saw a total pay package of (pounds) 644,000 last year.
ScottishPower insisted that across-the-board increases reflected a dramatic turnaround in the company’s fortunes. However, some sceptical investors argued that the directors were responsible for its previous difficulties.
Similar sentiments were voiced at August’s annual meeting of Perth transport giant Stagecoach, where chairman Robert Speirs insisted that the board deserved to be rewarded for arresting the company’s decline.
Martin Griffiths, financial director, enjoyed a 62% rise in his total remuneration package last year, to (pounds) 331,000. Shareholder dissent saw 14% of investors vote against the remuneration report or abstain – a significant rebellion given that co-founders Brian Souter and Ann Gloag control 26% of the business.
Among other Scots plcs, Angus Cockburn at Aggreko ((pounds) 218,000) and Iain Lanaghan at FirstGroup ((pounds) 292,000) both enjoyed pay rises of more than 20%.
Cairn Energy’s Kevin Hart – one of the youngest finance directors in the 250 at 35 – was paid (pounds) 274,000, 12% more than the previous year.
Weir Group’s Ian Boyd – one of the oldest finance directors at 58 – was also handed a 12% increase, taking his package to (pounds) 283,000.
Boyd announced in October that he is to retire after 22 years running the finances of Scotland’s biggest engineering firms.
There were exceptions to the prevailing largesse. A torrid year for Aberdeen Asset Management, which was engulfed by the split- capital investment debacle, coincided with a near 50% pay cut for finance director Bill Rattray.
His total package slipped to (pounds) 208,000 last year from (pounds) 309,000 in 2001.
John Maguire of Thus also saw his pay packet shrink. He was one of three executive directors of the telecoms group not to receive a bonus after the trio missed their performance targets. Maguire’s total package dipped 24%, to (pounds) 233,000. Across the FTSE-100, average finance director pay rose 13% in the last financial year, to (pounds) 682,000. Of the 194 FDs in the FTSE-350 for whom comparable data is available, some 34 saw their total pay fall, Financial Director found.
