Fund bosses pocket £2.2m in bonuses
Hargreaves chiefs cash in amid Woodford scandal
HARGREAVES Lansdown has sparked fury among former Woodford investors after awarding bosses £2.2m in bonuses.
The investment platform, which faces legal action for recommending the doomed Woodford Equity Income fund right up until its suspension, handed share awards to nine directors over the 2019/2020 financial year.
The rewards, ranging from £50,993 to £828,794, come as thousands of customers wait for the remnants of their savings from the collapsed fund.
Around 300,000 were exposed, either because they had directly invested in it or because they had money in an ownbrand Hargreaves fund which then put some of that into Woodford’s empire.
Many who invested directly followed the recommendation of Hargreaves’ best-buy list, which included the Equity Income fund up until June 2019 when it froze savers’ money inside.
Chris Hill, 49, Hargreaves’ chief executive, was handed the largest bonus, worth £828,794, as part of a £2.7m total pay cheque. He last year waived the platform’s fees for investors stuck in the fund, and gave up his own bonus for the 2018/19 financial year.
Philip Johnson, chief financial officer, bagged £579,985 from a shares bonus as part of his £1.9m annual package.
And Lee Gardhouse, who oversaw funds which ploughed £542m into Woodford Equity Income, was handed a bonus worth £50,993. Hargreaves does not disclose Gardhouse’s salary.
Kamran Vojdani, a solicitor at Leigh Day which is investigating a claim against Hargreaves, said: ‘Many investors, senior in age who worked their whole lives, lost significant elements of their pension income from investing in the fund. Clearly, these people will be very upset.’
At RGL Management, another firm investigating a claim against Hargreaves, chief executive James Hayward said: ‘ Given more than £1bn of investors’ money has evaporated as a result of Hargreaves Lansdown’s behaviour in respect of the fund, we find the behaviour of senior management abhorrent.’
Luke Hildyard, director of the High Pay Centre, said: ‘These huge payouts don’t inspire confidence that executive bonuses are subject to proper oversight and dependent on good performance in line with customer expectations. British business is unlikely to achieve its full potential when top bosses achieve such extraordinary, life- changing sums for poor or mediocre performance.’
Woodford Equity Income had £3.8bn in it when it was suspended, down from more than £10bn at the peak. It shuttered after poor performance prompted several investors to try to pull their money out. But the fund didn’t have enough cash available, and had to be suspended while it tried to sell its assets.
It later emerged that Neil Woodford, the fund’s once-feted manager, had invested too heavily in risky, hard-to-sell stocks.
Link Fund Solutions, which was meant to be overseeing the fund, decided to wind it up, sell off the assets and return investors their money.
But investors have only received £2.5bn of their money back, and have lost around £1.1bn just since the fund suspended.
Hargreaves Lansdown declined to comment.