Payments to Carillion fat cats halted

FAt cats at collapsed building firm Carillion will no longer be entitled to bonus payouts after a public outcry.

It emerged that bosses – including former chief executive Richard Howson – were due to keep getting payments despite the company going into liquidation on Monday, owing £3billion.

Mr Howson, 49, stepped down in July last year but, as part of his departure deal, Carillion agreed to keep paying him a £660,000 salary and £28,000 in benefits until October.

Former finance chief Zafar Khan, 49, who left Carillion in September, was due to receive £425,000 in base salary for 12 months, while interim chief executive Keith Cochrane was due to be paid his £750,000 salary until July, despite leaving the company in February.

But yesterday, the Insolvency Service said: ‘Any bonus payment to directors, beyond the liquidation date, have been stopped, and this includes the severance payments which were being paid to some senior executives who left the company.’

Cabinet Office Minister Oliver Dowden said: ‘Payments to directors beyond liquidation date have been stopped.

‘So these people aren’t going to be paid.’

It comes as the Prime Minister indicated it was possible to claw back bonuses that have already been paid. theresa May told MPs that the receiver’s inquiry into Carillion’s collapse would be fast-tracked and could lead to bonus payments being taken from directors.

She said: ‘In reviewing payments to executives, where

‘Take action to recover money’

those payments are unlawful or unjustified, the official receiver has the powers to take action to recover those payments.’

Mr Howson pocketed £1.5million in salary, bonuses and pension payments during 2016. Carillion went into liquidation with only £29million cash in the bank, £1.3billion of debt and a £587million pension deficit, after struggling with a string of contracts that turned sour.

the collapse has put at risk around 3,000 suppliers, 48,500 workers worldwide and 28,500 pension scheme members.

Ministers have been left scrambling to shore up public services which were run by the firm, which employs 28,000 in the UK and has 450 government contracts.

Yesterday, Downing Street said more than 90 per cent of Carillion’s private sector customers had told the receiver they wanted staff to continue and were willing to pay them. Meanwhile, Business Secretary Greg Clark has met high street banking chiefs to urge banks to extend credit lines to suppliers hit by Carillion’s collapse.

‘the Business Secretary was clear that SMEs [small and medium-sized entities] were not the reason for the collapse of Carillion and it was important the banks had that in mind’, a spokesman said.

Britain’s banks are offering overdraft extensions and other emergency measures.

Mr Clark said: ‘It is essential that small businesses exposed to the Carillion insolvency are given the support they need by their lenders.’