£530m deal could land me big payday, admits chief of LV
THE boss of LV has admitted he could be in line for a bumper payday if he stays on after Bain Capital’s £530 million takeover.
Mark Hartigan, 58, is expected to remain in the top role if the mutual insurer is sold to the US private equity giant, and could earn millions through lucrative long-term bonus plans that private equity groups typically hand their staff.
Bain’s takeover has come under fierce attack from political figures such as Lord Heseltine and Ed Miliband, as well as the City and industry figures.
Members must still vote on the controversial tie-up, which would give its 1.2 million members only about £100 each. If Bain buys the business after winning approval from financial regulators and LV’s members, it will demutualise the insurer, ditching its proud history of putting customers first.
Mr Hartigan said: ‘Most private equity owners give their management [teams] an incentive plan to align long-term success with the success of the management team.
‘I’m not going to deny that should I stay in Bain in the future, they might try to do that for LV. But any detail of that is certainly not a driver [for the deal].’ He added: ‘I’m here to serve. That’s what I’m doing.’
Matt Popoli, the Bain executive running the LV bid, said there was no ‘big pot of gold’ waiting for Mr Hartigan.
He added: ‘In terms of Mark’s potential future package, nothing is finalised. If Mark does sign a new contract, we expect it will be very similar to his previous contract.’ Mr Hartigan was paid £1.2 million last year.
The Daily Mail is campaigning to save LV from a private equity takeover, after the firms snapped up 123 businesses worth £36 billion during the pandemic.
It emerged this weekend that rival mutual insurer Royal London has put forward a controversial proposal to Bain to split LV between the two companies.
Royal London chief executive Barry O’Dwyer has approached Mr Hartigan with what he describes as an ‘enhanced’ deal that would ‘be more attractive’ to the mutual’s membership.
Bain’s deal was chosen out of 12 potential bids for LV, which was founded in 1843 in Liverpool. LV insists Bain’s offer was the best option for policyholders, who will vote on the deal on December 10.
Mr O’Dwyer suggested setting up three-way discussions between the companies, The Mail on Sunday revealed. And he said the talks would be worth having because there was a risk that members could reject Bain’s offer.
It is thought Royal London wants to buy LV’s with-profits policies, while it is keen for Bain to take on the LV brand as a separate company aimed at attracting new customers.
About 297,000 of LV’s 1.2million policyholders have withprofits policies. They are the legal owners of the business.
In addition to the £100 they would each receive under the deal, with-profits members would also receive the equivalent of 0.1 per cent of the value of their policy for every year they have held it – about £50 for most members.