Beleaguered software company iSoft has been blacklisted by an influential
The Association of British Insurers (ABI) tagged the ailing business with a
‘red top’ classification, its highest warning of corporate governance failures,
just before the company’s AGM takes place next Tuesday (17 October).
iSoft incurred the wrath of the powerful body after it emerged that FD Gavin
James was handed a share deal as part of his employment package. Described as a
deferred bonus, it is equivalent to his base salary of about £200,000, but is
dependent on a minimum commitment of three years at iSoft.
An iSoft spokespman told The Guardian: ‘On this occasion, we had to
offer a pretty attractive package for Gavin James to join the company. We accept
this is not entirely in accordance with the [shareholder] recommendations. I
believe that a number of our major shareholders understand that point.’
The ‘red top’ rating will be sure to cause concerns amongst leading City
investors, heralding more problems for the software supplier.
iSoft showed a pre-tax loss of £344m for the year to 30 April 2006. After
this point the company, currently the subject of an FSA investigation, had to
overhaul its accounting policies. An imprudent revenue recognition and the use
of an off-balance sheet credit facility forced it to write-off millions of
pounds of profits.
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