Roads paved with gold
They run a non-profit ... but Motability bosses still rake in up to £1.7m a year
IT is a non-profit, charitable scheme for the disabled – but the men who run Motability Operations earn vast sums and enjoy luxury lifestyles.
Their pay bonanzas of up to £1.7million a year dwarf the salaries earned by top charity bosses who are on an average of £255,000.
The scheme is entirely funded by the public – indirectly – through disability allowance payments. It also needs to borrow to fund the purchase of new cars. Its 630,000- strong fleet is worth about £6billion. While the investors who lend funds to Motability get their money back, plus interest, the Government does not. It also has £2.4billion of reserves in the bank.
THE HEAD HONCHO PAID £1.7M
Mike Betts has been chief executive of Motability Operations since 2003 and is paid as much a month as the Prime Minister earns in a year.
His £1.7million income last year is almost 12 times Theresa May’s £150,402 salary.
Little wonder the 55-year-old is so wealthy he is a private customer of the Queen’s bank.
He used a Coutts mortgage to buy his luxury apartment overlooking Tower Bridge for £2.5million in 2010. It is now worth £5million.
Mr Betts lives there with his second wife, Julie, 49, and the couple enjoy a luxury lifestyle with holidays in the Caribbean.
His pay has soared in his decade at the helm – totalling nearly £15million over that period – with the true figures buried in the smallprint of the company’s accounts.
In 2008, the father of two was paid £355,956 in basic salary. But with bonuses, pension and longterm incentive scheme payments his salary package soared to £954,749. By last year Mr Betts was on £549,258 in basic pay alone.
But analysis of the annual report – including financial notes written in small print which are spread over 45 pages – shows Mr Betts’s earnings crept toward £2million.
He is described as the ‘highestpaid director’ rather than by name.
With his bonuses and various other payments, he was paid £1.7million. He was awarded a further ‘ deferred’ bonus of £263,000 for his work in 2017, due to be paid in 2020 – which would nudge up his takings last year to £1.96million.
Mr Betts used to live in a £600,000 semi in Bracknell, Berkshire, but after separating from his first wife, he bought the Thames-side apartment with his second wife in 2010.
EX-NUMBER 2 GOT £1.1M
David Gilman was Motability’s second- in- command until he retired as finance director in Sep- tember 2016. Like Mr Betts, he owns a stunning riverside apartment overlooking Tower Bridge.
From the £1million flat at St Katherine’s Dock, the pair could just about wave at each other across the Thames because their properties are almost facing.
Twice-married Mr Gilman, 65, earned an estimated £1.1million in his final year in the job. After 13 years at Motability, he accrued an enviable package of pay and perks.
Although the 2016 accounts specify a ‘headline’ figure of £548,000 for his basic salary and bonuses, Mr Gilman, who is an accountant, also scooped a ‘deferred bonus’ along with a ‘long term incentive plan’ payment.
These have had the effect of roughly doubling his 2017 earnings. The deferred bonus element is payable in two or three years’ time.
When his successor as finance director, Matthew Hamilton-James, was announced, Mr Gilman wrote: ‘I pass on the scheme’s finances into a very safe pair of hands under Matthew’s stewardship.’
BIKE-MAD DAD’S £550K
The new money man at Motability is Matthew Hamilton-James.
The 44-year-old cycling enthusiast is on the road to serious wealth. His pay for 2017 was more than half a million pounds.
The married father of four’s basic salary was £ 255,000, but with bonuses and benefits on top, he earned a total of £551,000. A portion of that – £121,000 – is ‘deferred’, until 2020.
Mr Hamilton- James, who lives in Bristol, has been an accountant at Motability since 2001, and became head of finance in October 2016. That year he and his son raised £ 2,800 for the charity PROPS, which helps young disabled people, by cycling from Bristol to Bordeaux.
CHAIRMAN ON £173K
Chairman Neil Johnson was paid £173,000 in 2017, £184,000 in 2016 and £196,000 in 2015 by Motability – and he has other lucrative jobs, too. Cardiff-born Mr Johnson has chaired or been a director of more than 40 companies, including toymaker Hornby, car makers Jaguar and Land Rover, and the RAC.
He is currently chairman of private equity investment trust Electra Plc, which recently paid dividends worth more than £1billion to its shareholders. He is also chairman of Synthomer Plc, a multinational chemicals firm.
Father of four Mr Johnson, 68, lives in a £3million six-bedroom house next to Wandsworth Common in south London.
Awarded an OBE, he served as a member of the Metropolitan Police Authority in London until 2012, and he was the Queen’s Deputy Lieutenant for the City of Westminster for 14 years until 2007.
He also served for five years as a member of the Prime Minister’s advisory panel for the Citizen’s Charter.
THEIR PAY COMMITTEE
Directors’ pay is decided by Motability’s remuneration committee. The six directors on this panel, whose chairman is Neill Thomas, are selected by the nominations committee, one of whose members is Mr Thomas himself.
And the nominations committee is chaired by Neil Johnson, who is also a member of Mr Thomas’s remuneration committee.
Chief executive Mr Betts also attends the meetings about directors’ pay. The annual report says he leaves when his own pay is discussed.
Every year so far, the committee has decided the company had done so well that all the executive directors should receive their bonuses.
Company performance is based on measures including ‘excellent customer satisfaction’, ‘leadership’ and ‘financial metrics’ such as maintaining the company’s high credit score with banks.
Value for money for taxpayers is not one of the criteria.
As well as their base salary and bonuses, directors enjoy perks such as private medical insurance, life assurance, travel insurance and a company car. Motability says it
regularly reviews directors’ pay against that of other companies ‘to ensure that it is competitive’.
Nominations for directors to sit on the remuneration committee are voted on by Motability’s full board of directors, which includes five independent nonexecutive directors who are ‘independent in both character and judgement’.
Mr Thomas was in charge when £1.7million was agreed for chief executive Mr Betts and £1million for the former second-in- command Mr Gilman. The role of the remuneration committee is to decide how much the firm’s top people should be paid. Mr Thomas, 53, is himself paid only a relatively modest salary of £64,000. He was previously head of corporate finance at City giant KPMG, one of the ‘ big four’ accountancy firms.
Prior to joining KPMG in 2001, he worked for 15 years for wealth management firm Schroders. On the subject of directors’ pay, Lord Sterling, the chairman and co–founder of the Motability charity, described the executives as ‘one of the finest management teams I have ever come across’.
He said Mr Betts was ‘ one of the most able executives I have ever come across’ and ‘ worth every penny he is paid’.
He added: ‘He runs Motability Operations with extremely high service levels.’ Declan O’Mahony, the charity’s director, said Mr Betts was ‘ highly effective’ and greatly admired by disability campaigners.
He said that executives’ pay had long-term bonuses built in to incentivise them to run the company well.
He added: ‘Under Mike Betts’s stewardship, you universally get feedback that the scheme is infinitely better than it was a few years ago.’
He said the executives were all chosen for their excellence and their pay was set by a committee which reviewed the market to make sure it was competitive. It was also in line with the company having a £4.2billion turnover, and the executives only got their full bonuses if they achieved ‘the highest possible level of customer service to disabled people’.
He added: ‘Bonuses are not awarded unless objectives have been met or exceeded; there are no “rewards for failure”.’