The Daily Telegraph
Pearson chief nets 20pc pay rise despite £2.6bn losses
By THE chief executive of educational publisher Pearson has received a 20pc pay rise, despite losses at the company plunging to £2.6bn last year.
According to the annual report, John Fallon had total remuneration of almost £1.52m last year, up from £1.26m in 2015.
Although his salary was relatively unchanged at £780,000 compared with £776,000 the previous year, his total pay was boosted by a £343,000 incentive payment, which he did not receive in 2015. Directors, including senior management, had their pay frozen from April, the report said.
Last month Pearson posted a record loss of £2.6bn for the year after a massive write-down on its North American higher education business, confirming a disastrous trading update in January that sent its shares down nearly 30pc. Mr Fallon came under fire from investors for failing to anticipate a steep decline in US sales, which suffered as more students chose to rent books from retailers such as Amazon rather than buying them.
At the time, Mr Fallon admitted that the company had “got some big calls wrong” and said the US business in particular would face a “very challenging couple of years”. Pearson only managed to hit its profit targets, which it had previously lowered, because of the weakness in sterling, which mitigated against some of the £180m wiped off the US division’s underlying profits.
In the annual report, released yesterday, chairman Sidney Taurel said 2016 had been a “difficult year for Pearson shareholders”. The business had cut both the short-term outlook for profits and future dividends. “Clearly, this is disappointing for everyone involved in the company,” he added.
The chairman said goals for the coming year would include running itself more efficiently and reducing its exposure to certain delivery services to focus on its online business.
A Pearson spokesman said Mr Fallon’s bonus reflected the fact that the company achieved its profit guidance and delivered a “major restructuring”, and his pay would also be frozen this year.
“After paying tax, and subject to the usual share dealing rules, John Fallon intends to use his full bonus payment to purchase shares in the company,” he added.