FirstGroup boss has pay slashed

The boss of Aberdeen-based transport giant FirstGroup has suffered a 17 per cent cut in his controversial £2 million total pay package.

The firm’s 2015 annual report, which showed underlying pre-tax profits rose by 46.5 per cent to £163.9million in the year to March 31, also revealed that while chief executive Tim O’Toole’s salary was unchanged at £846,000, his bonus was down by £22,000 at £578,000 and the pension contribution was down £3,000 at £176,000.

But, most significantly, there was no repeat of the award of free shares worth £324,000, which sparked a shareholder backlash when they were released to Mr O’Toole in November 2013 when the shares were 122.9p – almost exactly their level yesterday.

That award meant Mr O’Toole’s pay package had nearly doubled in value and concerns were raised by minor investor Sandell Asset Management while shareholder advisory groups led to a revolt at the company’s 2014 AGM.

Shareholders voted 25.5 per cent against the group’s annual report on remuneration, while a further 11.03 per cent voted down a separate ballot on its remuneration policy.

The episode also saw Chairman John McFarlane, who will step down next month to take up a £800,000-a-year role at Barclays, pledge to review the company’s pay policies and insisted Mr O’Toole did not “aggressively” seek remuneration.

Meanwhile, Chris Surch, FirstGroup’s finance director, who has also announced that he is stepping down after three years for personal reasons, received a total of £797,000 last year, down by £10,000.

FirstGroup said it was vital to be able to attract and recruit high-calibre executives, while relating reward to performance in the context of appropriate risk management.

The executive pay policy also aimed to align the interests of directors and senior managers with those of shareholders to “build a sustainable performance culture,” it added.

FirstGroup’s new remuneration policy will be put to a binding shareholder vote at the company’s annual general meeting on July 16.