Chiefs’ bonuses protected by late tweak to pay policy

BUST outsourcing firm Carillion introduced new rules protecting bosses’ bonuses in the run up to its collapse.

The firm changed the wording of its pay policy to apparently make it harder for investors to claw back the money even if the company went under.

The changes in the pay deal, revealed by the Daily Mail in September, could preserve any bonuses Carillion chiefs pocketed as the firm teetered on the brink.

Chief executive Richard Howson, 49, quit in September after taking home £582,000 in bonuses and long-term incentive awards last year on top of his £660,000 basic salary. Finance chief Richard Adam, 59, retired at the end of December 2016, taking home £418,000 on top of his £460,000 basic salary.

Before 2016, bosses could be forced to hand back their annual bonuses and share awards in ‘circumstances of corporate failure’. But in the group’s 2016 annual report this wording was clarified.

It stated deferred bonuses may be reduced in circumstances of corporate failure. But it went on to say the so-called ‘clawback’ provisions could be applied in only two circumstances: if results had been misstated or if someone was guilty of gross misconduct.

Mr Howson has made £1.9million in cash and share bonuses during his tenure, and Mr Adam has had up to £2.6million in extra cash and shares since starting in 2006, according to Mail calculations. But crucially, although they have been condemned for their role in the collapse of Carillion, the pair have not been found guilty of misconduct.