Bob Mackenzie, the former chairman of the AA group who was sacked for “gross misconduct”, is funding the cost of his own hospital stay after the roadside assistance group cancelled his private medical cover.
The AA has stopped paying Mr Mackenzie’s salary, which was £750,000 last year, and ended all his additional benefits, including medical cover, after he was sacked for allegedly lashing out at a colleague. However, Mr Mackenzie’s son Peter said in a statement that his father was suffering from an “extremely distressing mental health issue” and had been admitted to hospital as he was “very unwell” adding: “The family trusts that all parties will act responsibly towards a loyal servant of the company in a manner which reflects the stress he has been suffering.”
The Times understands that a specialist has recommended that Mr Mackenzie spend at least three weeks as an inpatient at an undisclosed private hospital in London that costs about £2,500 a day. If the executive, who helped float the AA on the London stock market about two years ago, stays a minimum of three weeks his medical bill could easily top £50,000.
Mr Mackenzie and his family have hired Bird & Bird as legal advisers to represent him. The AA is being advised by Herbert Smith, another large law firm. A protracted battle is expected between the AA and Mr Mackenzie on the terms of his departure.
At stake is about 33 million special shares that Mr Mackenzie owns which are convertible into ordinary shares if he meets certain performance hurdles, namely achieving a total shareholder return of 12 per cent on a compounded basis for five years. If Mr Mackenzie is deemed a “bad leaver” he will have to forfeit all the shares for one penny. However, it is not certain that this incentive scheme will pay out given the AA’s recent poor trading.
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The AA could also use malus and clawback provisions to try to retrieve Mr Mackenzie’s last annual bonus of £514,000, according to the roadside assistance group’s annual report. However, The Times understands that it is unlikely that the AA will seek to recover the bonus.
News of the abrupt departure of Mr Mackenzie on Tuesday, as well as a downbeat pre-close trading statement, wiped about £210 million off the value of the group. The shares have recovered slightly since and closed down yesterday at ¾ of a penny at 210¾p a share. All parties declined to comment.