Performance pay for Consignia boss
Allan Leighton will receive up to Pounds 200,000 a year as chairman of Consignia and may keep some of his 10 other directorships – but he will have to demonstrate performance to earn his pay.
Patricia Hewitt, trade and industry secretary, has insisted that 90 per cent of his remuneration must depend on the impact he makes on efficiency at the loss-making former Post Office, which faces up to 40,000 job losses.
Mr Leighton will remain on the basic salary of Pounds 20,000 a year he was earning for working one day a week as a non-executive director of the company.
The rest of his package will be determined by performance criteria under discussion as part of Consignia’s Pounds 1.2bn restructuring plan.
The highly incentivised arrangement contrasts with that of the previous chairman Neville Bain, who received a basic salary of Pounds 93,000 but no bonus.
John Roberts, chief executive, was paid a salary of Pounds 200,000 last year, but failed to meet his performance-related bonus target.
Mr Leighton has said that he would give up some of the directorships he holds outside Consignia, but the number has yet to be decided. He estimates his work at Consignia will now take up two days a week.
He is chairman of BHS and a director of Scottish Power, BSkyB, Dyson and George Weston. He chairs Race for Opportunity, Wilson Connolly Holdings, Cannons Group and Lastminute.com and is deputy chairman of Leeds Sporting.
The trade and industry secretary has no problems with large salaries for successful executives, but is eager for Mr Leighton to make his mark at Consignia.
Earlier this week she said he would be responsible for “getting a grip of the situation: to stem the losses, reform the company’s industrial relations and to develop a new vision and strategy for the future”.
Mr Leighton, who is said to be happy with the performance-related package, volunteered to give up some directorships without pressure from Ms Hewitt. Both recognised he needed to devote as much time as possible to his new post.
Copyright © 2002: Financial Times Group
