Housing firm slammed over pay-off deals
Sunderland housing group Gentoo has been slammed by a Government watchdog for the way it has handled executive pay-off deals.
The company has been downgraded by the Homes and Communities Agency (HCA) after a report said it “does not meet our governance requirements”.
Sunderland housing group Gentoo has been slammed by a Government watchdog for the way it has handled executive pay-off deals.
The company has been downgraded by the Homes and Communities Agency (HCA) after a report said it “does not meet our governance requirements” before adding that there are “issues of serious regulatory concern”.
The company’s chief executive John Craggs left his role last week after resigning,
There has been no indication of which executives the report relates to.
It comes after Gentoo announced in October 2015 plans to cut 330 jobs, which was 18% of the workforce.
Gentoo has recently appointed Keith Loraine OBE as its chairman, who has said he is “bitterly disappointed” at the announcement.
The report reads: “The regulator has considered evidence gathered as preparation for an In-Depth Assessment and further information provided by Gentoo.
“The regulator lacks assurance that the board has maintained effective control and exercised its role with appropriate skill or diligence.
“The board has failed to ensure adequate control and scrutiny in discharging its responsibilities.
“It has lacked effective oversight and an appreciation of risk in discharging its responsibilities in line with its own governing documents and scheme of delegation.
“It has failed to ensure that governance arrangements were operating at the most basic level. “During a significant period of restructuring the board exercised weak governance and internal control when agreeing executive contracts and severance payments to outgoing executives.
“In doing so, the board has failed to safeguard its reputation, and that of the sector.”
It added: “The board has been going through a period of significant renewal and having identified issues when finalising the 2016/17 financial statements the chair designate promptly brought this issue to the regulator’s attention and commissioned an independent investigation into the circumstances.
“The regulator has concluded that the board has failed to exercise adequate control or fully assess the risks associated in agreeing executive contracts and severance packages.
“The roles of the remuneration committee and board in scrutinising and agreeing matters of executive pay lacked clarity and transparency and as a result proposals were not diligently scrutinised and challenged.”
Gentoo operates principally in Sunderland, where the group is based in Doxford Park, and it has small numbers of homes in Northumberland, Redcar and Cleveland, and South Tyneside.
It owns and manages approximately 29,000 homes the majority of which are for general needs.
In addition, it has approximately 900 leasehold and affordable home ownership properties.
As of March, Gentoo employed 1,343 full-time staff (full time equivalents) and its consolidated turnover in the 2016/17 financial year was £193.3million.