The emergence of the UK’s first million pound FD has been confirmed by the annual survey from our sister title Financial Director. It’s quite a package and quite a breakthrough too – a real recognition that accountants are the most important professional group when it comes to ensuring the success of UK plc.
There are several interesting aspects to Robert McCullough of AMVESCAP’s package. He draws a comparatively paltry #255,000 in basic salary. An #800,000-plus bonus took him beyond seven figures. He may have been the UK’s highest paid FD for three years in a row but no one has breached this symbolic barrier before.
At that level it is only right that so much of his salary was made up of a bonus. Anyone working at this level should expect pay to be linked to performance. But with it, the approach brings responsibility. Measuring performance is not easy. A link to a short-term measure like share price acts against not for the interests of stakeholders. Asset management is an industry that demands its own measures of success. And they are not measures that would suit a company like, say, Railtrack.
Much gets written about the appropriateness of ‘fat cat’ salary packages.
But if they are properly tied to results is there any reason why the sky should not be the limit?
And would anyone begrudge new Railtrack chief executive Steven Marshall – himself the company’s former FD – substantial reward if he can deliver a safe, reliable rail network?
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