Balfour chief executive praised for 2009 success as shareholders complain of āexcessiveā rewards
Ian Tyler of Balfour Beatty, has come top of ŠŌ°ÉµēĢØās chief executive value for money table, in the same week that āexcessiveā bonuses were criticised by shareholder groups.
The table is based on nine firms that released figures for the year ended 31 December 2009. A value for money rating is calculated by dividing pre-tax profit (including exceptional items) by the chief executiveās pay.
Tyler tops the list for the second time in a row with a figure of 286 (2008: 278) after steering his firm to a Ā£267m profit and taking home Ā£933,000. John McDonough of Carillion was some distance behind on 78 (82); Costainās Andrew Wyllie scored 25 (32).
One analyst said Tyler deserved his place. āHeās done fantastically well with domestic acquisitions and Parsons Brinckerhoff in the US. Theyāve proved a Brit can make money in the US, and Iād back the US economy over the UK for the next few years.ā
The worst performing boss was Peter Redfern of Taylor Wimpey with ā380 (ā2,254), the result of his Ā£1.7m pay packet and a pre-tax loss of Ā£641m. Redfernās pay was criticised this week by the Association of British Insurers, which represents major shareholders; small shareholder lobby group Pirc advised investors to oppose his remuneration at the firmās annual meeting on 29 April (see below).
A City analyst said: āA chief executive should get a bonus only if the company makes a profit.
Or, keep it about cash flow and working capital and then when the market turns they wonāt get a bonus. They canāt have it both ways.ā
One construction boss added: āItās a tricky one. You have to lead by example but during the downturn you also have to reward people. The main thing is that bonuses are commensurate with what you achieve.ā
Mike Farley, chief executive of Persimmon, performed relatively well, with an indicator of 61 (ā905). He was paid a Ā£406,000 bonus and his total package was Ā£1.3m after Persimmon made a profit of Ā£77.8m, including land writebacks. Despite that, the company has also been in the sights of Pirc, which called on shareholders to oppose his re-election this week.
In March Richard Lambert, director-general of the CBI, said top executives ārisk being treated as aliensā because their pay is so much greater than everyone elseās.
Housebuilders under fire
On Tuesday the Association of British Insurers issued an alert on the Ā£1.7m pay and bonus package of Peter Redfern, chief executive of Taylor Wimpey. It declined to go into detail but said the alert served to flag up his level of pay.
Shareholder group Pirc was more outspoken in its criticism and said rewarding bosses for refinancing and restructuring companies in difficulty was disproportionate.
A spokesperson for Pirc said: āThis is surely part of a directorās duties and therefore does it require them to be rewarded for doing their jobs?ā
Pirc also opposed the recent Ā£406,000 bonus awarded to Persimmon boss Mike Farley, claiming it was āexcessiveā.
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