Secret affair costs company boss £340,000

Board of Lions’ sponsor cuts executive’s bonus after he failed to reveal ‘conflict of interest’ relationship

By in Sydney THE head of one of the world’s largest insurance companies had his pay cut by £340,000 because he failed to notify the board that he was having a relationship with his personal assistant.

QBE, one of Australia’s largest firms, revealed in its remuneration report that a scheduled bonus of £1.71 million for John Neal, the chief executive, had been reduced by 20 per cent because of Mr Neal’s “personal decisions”.

The company’s board took the decision after Mr Neal failed to swiftly disclose that he had engaged in a personal relationship which risked causing a conflict of interest. Such disclosures are required by the company’s executive code of conduct.

Mr Neal reportedly separated from his wife last year and began a relationship with his personal assistant, who is also the personal assistant to the board. The woman was not named but has apparently worked for him for 10 years. According to The Australian Financial Review, she plans to voluntarily leave the firm.

Explaining the unusual decision, the company said in a statement: “Both parties agree some recent personal decisions by the CEO have been inconsistent with the board’s expectations.” Mr Neal admitted to the wrongdoing, saying his conduct risked causing damage to the firm’s reputation.

“I was not timely in disclosing to the board a personal relationship,” Mr Neal said. “I am truly sorry that something that is so deeply private has become public knowledge... It’s a material amount for me, I’ve understood it,

“I’ve accepted it, but it was not my decision… The code of conduct requires that that’s disclosed immediately to the board, which I did not do.”

He added: “My judgment from outside is that the board is rightly preoc- cupied with the reputation of the company and feels that I am the custodian of that reputation and therefore they needed to take some decision.”

The couple’s relationship reported on Feb 17 by The Australian newspaper, which said the pairing was “becoming more widely known at the [company] as they begin to step out publicly as a couple”.

The incident follows a continuing sordid scandal in Australia involving a relationship between Tim Worner, the head of media firm Seven West Media, and Amber Harrison, a former executive assistant. She has revealed alleged details of their two-year affair, including claims of drug use and unauthorised credit card use. He had his bonus cut by £60,000 but denied many of the claims and was cleared of misconduct.

QBE, which employs nearly 14,500 people worldwide, is one of the world’s largest insurers. The firm’s blue and white logo is familiar to rugby fans as the sponsor of international tournaments, including the British & Irish Lions’ tour to New Zealand in 2017.