The chief executive of Kesa Electricals, the parent company of Comet, is the most overpaid boss in the FTSE 250, investors have been told.
Thierry Falque-Pierrotin made £352,000 more last year than he should have, based on the company’s market value and turnover, according to a report by Inbucon, the influential pay specialist.
Also overpaid, research from its Meis database suggested, were Martin Morgan, chief executive of Daily Mail & General Trust, who took home £325,000 more than analysis suggested was justified, and Tony Buckingham, the chief executive of Heritage Oil, who was overpaid by £315,000.
Inbucon, which provides pay reports for the National Association of Pension Funds, is an independent Richmond-based company run by Stella Brooks, a former Mercer consultant who has 20 years’ experience advising companies on pay.
Its review of the base salaries of FTSE 250 bosses concluded that high salaries did not necessarily lead to greater rewards for investors. In fact, the heads of companies with conservative pay structures tended to return more to shareholders over a three-year period than their more lavishly rewarded counterparts, the study indicated.
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The report comes amid increasing scrutiny of executive compensation, with shareholders demanding more detailed analysis of whether the sums earned by Britain’s senior executives are justified by their performance.
Inbucon said that its research focused on base salaries because these were the starting point for other awards, such as bonuses or share incentives. Ms Brooks said: “We’re not saying it’s the only way to look at [pay], but it’s the point that triggers everything else.”
Kesa Electricals, which also operates the Darty retail chain in France, paid Mr Falque-Pierrotin a base salary of £891,000 for the year to April 30, 2010, the same as his predecessor. His total compensation was £2.1 million, according to the company’s latest annual report.
During the same period, the company’s revenues fell by 1.5 per cent on a like-for-like basis to £5.1 billion, although pre-tax profits rebounded to £69.6 million after it posted an £81.8 million loss the previous year.
Kesa Electricals declined to comment yesterday.
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Other FTSE 250 companies whose chief executives’ base pay was deemed excessive included the London Stock Exchange, Debenhams and Thomas Cook Group, Inbucon said.
In contrast, the study identified nearly 100 companies whose chief executives were underpaid, relative to the stated parameters. At the top of this list was Ashmore Group, where Mark Coombs was underpaid by £379,000. However, the research only took into account Mr Coombs’s £100,000 base salary and not the £4.2 million cash bonus that lifted his overall compensation to £4.3 million for the year to June 30.
Also underpaid, when their base salary was measured against market value and turnover, were the heads of Sports Direct, Hargreaves Lansdown, Michael Page and Balfour Beatty, Inbucon said.
A spokesman for Daily Mail & General Trust disputed the research and said: “DMGT is consistently one of the most highly regarded and successful media groups and its management is among the most successful in the [media] industry. We believe Mr Morgan’s pay is entirely appropriate and justified.”
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Overpaid by . . .
£352,498 Thierry Falque-Pierrotin, Kesa Electricals, base pay £891,156, total pay £2.1m £324,971 Martin Morgan, Daily Mail & General Trust, base pay £850,000, total pay £1.2m £314,946 Tony Buckingham, Heritage Oil*, base pay £675,000, total pay £1.8m £305,153 Benzion Freshwater, Daejan Holdings, base pay £700,000, total pay £720,000 £279,263 Mike Lawrie, Misys, base pay £676,785, total pay £2.1m
Underpaid by . . .
£379,210 Mark Coombs, Ashmore, base pay £100,000, total pay £4.3m £327,588 Dave Forsey, Sports Direct International, base pay £150,000, total pay £150,000 £325,300 Kostyantin Zhevago, Ferrexpro*, base pay £174,000, total pay £200,000 £293,713 Andrew Tinkler, Stobart Group, base pay £100,000, total pay £205,500 £245,243 Richard Ensor, Euromoney Institutional Investor, £188,497, £4m Source: Company accounts, Meis.
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*Figures from 2009 annual report