The £50m payday: Anger at Rolls Royce, Shell and WPP over ‘fat cat’ bosses’ generous deals
More than £51 million of pay and perks was dished out to three of the City’s biggest names as the vast rewards for fat cats showed no sign of slowing.
WPP boss Martin Sorrell was the biggest earner as he was awarded £42 million in shares from his advertising firm.
Shell boss Ben van Beurden saw his pay jump 54 per cent last year despite a fall in profits, netting him around £7.5 million.
More than £51 million of pay and perks was dished out to three of the City’s biggest names (From left: Rolls-Royce boss Warren East, Shell’s Ben van Beurden, WPP founder Martin Sorrell)
And perhaps the most controversial was almost £1 million in bonuses for Rolls-Royce boss Warren East on top of his £925,000 salary.
This came despite the company posting one of the worst losses in British corporate history and as 8,000 managers – including East – accepted a freeze on pay until September to save the company £14 million.
Stefan Stern, director of the High Pay Centre, said: ‘Some of these big payments really seem to be about retaining people, not about performance, and that’s not good practice. I think some companies need to exercise a bit more restraint.
‘This is what’s damaging to the workforce because they are being told to have realistic expectations but then the restraint does not seem to apply to the people at the top.
Last year, profits at Shell fell to £3 billion and it performed worse than analysts had expected in the fourth quarter
‘There is a systemic problem here and the managers and shareholders need to step up. I think it’s hard to justify given the performance of some of these companies.’
Van Beurden, 58, took home £7 million in 2016 compared to £4.5 million a year earlier, mainly due to deferred bonuses and share plans.
Last year, profits at the company fell to £3 billion and it performed worse than analysts had expected in the fourth quarter.
But the oil major said that under van Beurden’s leadership Shell was ‘tightly controlling capital investment and operating expenses while still investing in growth opportunities’.
At Rolls, East, 55, was paid a bonus of £916,000 on top of his salary of £925,000. In February the company, which makes aeroplane engines for Boeing and power plants for Royal Navy submarines, posted a historic loss for 2016 of around £4 billion. Most of that was due to the fall in the pound and a fine for bribery from before East took over.
Remuneration committee chair Ruth Cairnie defended the decision to award him a bonus by saying the company’s performance was better than expected.
Rolls’ annual report yesterday also revealed it had cancelled bonuses for employees who left due to its bribery scandal.
Last month the company agreed a record £671 million payment to authorities in the UK, US and Brazil to settle allegations it had bribed its way into contracts around the world. Disciplinary proceedings were brought against 38 employees over the scandal. Eleven left during the disciplinary process, six were sacked, and others punished but not sacked.
Although the largest deal, Sir Martin Sorrell’s £42 million share award fell short of the £63 million he received the year before.
It means the 72-year-old, also paid £70.4 million in 2015, has received more than £200 million in pay, bonuses and awards in the last five years.
He was awarded 2.4 million shares and immediately sold half, worth £20 million, to cover the tax due on the award.
WPP said the payout under the firm’s long-term incentive plan reflected the firm outperforming its competitors.