Boss’s bonus is slashed as pay backlash swells

Pearson chief loses out amid growing fury at rewards for failure

THE boss of education publisher Pearson could lose out on hundreds of thousands of pounds in potential bonuses amid a growing backlash over executive pay.

John Fallon, 54, sparked fury last week when it emerged he pocketed a 20pc pay rise last year despite his company posting a record loss and a fifth profit warning.

But Pearson plans to cut the performance-related shares it awards Fallon, meaning his bonus could fall by up to 25pc. His pay is also being frozen.

The publisher is among a number of companies facing criticism for awarding bonuses despite shaky performance. Last Thursday, shareholders in British housebuilder Crest Nicholson voted down the directors’ pay report.

A Pearson spokesman said: ‘Given Pearson’s lower long-term profits guidance, the board is freezing the chief executive’s base pay and will also reduce the economic value of the long-term performance-related shares.’

Married father-of-two Fallon took home £1.5m in 2016, up from £1.3m the year before. That was despite shares in Pearson falling 29pc, or more than £2bn, on a single day in January after its fifth profit warning in two years.

Pearson also announced 4,000 job cuts at the start of 2016.

The company has struggled against a collapse in the US market as students turn to renting rather than buying text books.

It comes as bank Standard Chartered is risking investors’ ire by potentially making it easier for boss Bill Winters, 55, to get his bonus by lowering one of the key profitability targets to which his reward is partly pegged.

Mothercare’s remuneration committee is also reportedly considering setting lower targets for bosses’ long-term share awards as the company struggles in a tough High Street market.

Chief executive Mark Newton-Jones, 49, took home £814,000 last year, while the company’s share price has fallen 30pc over the past year. A spokesman said: ‘We will consult fully with shareholders before making any award.’

Stefan Stern, director of the High Pay Centre, which campaigns for equal pay, said yesterday: ‘Remuneration committees need to be able to just say, it’s been a terrible year and we are not giving out a bonus.’