AN INDEPENDENT INQUIRY has been set up at investment fund Alliance Trust as to why bonus payments to two former executives were set too high and the errors missed by its auditors.
New chairman Lord Smith of Kelvin told the annual meeting in Dundee that the £2.8bn trust had paid out 32.5% of the maximum, based on the trust’s performance, but “on investigation we agreed the vesting should be lower at 27%”, the Herald Scotland reported. The mistake meant the total rewards for ex-CEO Katherine Garrett-Cox and former finance director Alan Trotter for 2015 had been “slightly overstated”.
Asked by Lord Smith to comment, Deloitte audit partner Calum Thomson said: “We tested bonuses on a sample basis – unfortunately they didn’t pick up the errors.”
The downward adjustment to the two directors was more than £100,000.
Shareholders raised concerns over the potential for reputational damage as a result of the error, having made similar mistakes “a few years” before, which led to senior managers having to repay overpayments.
Gregor Stewart, deputy chairman, told the AGM the trust is “committed to a full investigation of this…we aim to get to the bottom of it this time”.
Deloitte has been contacted for comment.
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