Mutual defends £2m pay deal for insurance boss
NFU Mutual has this week defended the £2 million plus remuneration package given to their chief executive last year, despite the UK’ s leading rural insurance company posting a quarter of a billion pound plus loss.
The annual report shows Lindsay Sinclair received a basic pay of £577,458, benefits worth £108,407, a bonus of £619,005 plus £699,966 from a long-term incentive plan giving a total of £2,091,454 in 2018 – marginally down on his 2017 package of £2,123,111
Justifying the £2m-plus package, a spokesperson for the Mutual said: “We need the right person in place to leadNFUMut ua land we believe people should be paid the market rate and that includes the full range of remuneration including a benefits package.
“NFU Mutual competes with other large financial institutions. This means we have to pay the mar - k et ratefo ran appointment at that level including base pay, benefits and both short- and long-term incentives.”
The spokesperson added that as a mutual organisation, the company was transparent on both the chief executive’s pay and the rewards for board directors – and members would be able to vote on these at the annual meeting in late June.
The annual report reveals that, due to losses in the Mutual’s investment portfolio, the overall financial loss for the company last year was £290m, despite the core insurance business – which underwrites more than £1.5 billion in annual premium in life and general insurance – continuing to perform strongly in 2018 with a profit of £142m.
Explaining the financial loss, the annual report said the company’s investments were “significantly impacted” by “political, social and economic uncertainty on a global scale”.
Despite the loss, the Mutual said it was positive about the future .“Our financial position remains in excellent shape. Our solvency levels are very strong and we are well positioned for 2019. We have always taken a long-term view on our investments and our great financial strength means we are resilient to short-term changes in the market.”
Commenting on prospects for the current year, the spokesperson said, “We expect the global markets to enter a phase of higher risks and lower returns compared to the last ten years.
“The first half of the year has largely seen markets behave as expected. Each of the major economies face their own risks, whether it be Brexit, trade wars, political uncertainty in the EU or the risk of rising US interest rates.”
In three years’ time in 2022, the Mutual will celebrate 100 years working with NFU Scotland with a country wide network of local agents working for both the insurance company and the farming lobby organisations.
NFU Scotland chief executive Scott Walker said: “The long-standing relationship thatNFUSh as with NFU Mutual remains very strong.
“The donation that NFUS continues to receive from NFU Mutual, amounting to £568,000 in 2018, is vital in allowing us to represent the industry and lobby for a secure and profitable Scottish farming sector.”
andrew@andrewarbuckle.org