Mark Hartigan, the previous chief govt of LV who led the UK life insurer throughout a failed try to promote to Bain Capital, has been awarded one other £318,000 bonus for 2022 that critics of the deal branded the “remaining insult” from his tenure.
Hartigan, who resigned from LV final yr within the fallout from the thwarted deal, was graded as a “good leaver” and so eligible for a prorated bonus, in line with the mutually owned life insurer’s annual report, printed on Thursday.
The group highlighted his efficiency within the “growth of a plan for LV persevering with as an unbiased enterprise and stabilising the enterprise and administration crew following members’ rejection of the Bain Capital transaction”.
Two years in the past, LV, which is owned by its prospects, was embroiled in a extremely publicised battle for the way forward for its mutual standing.
A deal struck with Bain, the US non-public fairness group, was rejected by members in late 2021 after they questioned the lack of mutuality, in addition to the payouts on provide within the transaction.
Hartigan’s £511,000 bonus for 2021 was closely criticised by opponents of the tried sale, given his outstanding function within the transaction. In latest months, LV has confronted calls to not pay him a bonus in respect of 2022.
“After losing over £30mn of members cash on the failed demutualisation, that is actually the ultimate insult from Mr Hartigan’s tenure,” mentioned Peter Hunt, managing companion at Mutuo, a marketing campaign group for mutuals.
He mentioned it was galling to members who had been supplied a “paltry” sum handy the enterprise over to the non-public fairness group.
Gareth Thomas, a Labour MP and a vocal critic of the deal, mentioned the plan to demutualise and promote to Bain was a “full waste of cash” and Hartigan “definitely doesn’t deserve one other pay-off”.
The episode did, he added, “at the least expose the necessity to cease incentives for demutualisation and assist mutuals entry capital to increase”. Thomas known as on ministers to kind this drawback “urgently to assist the likes of John Lewis”. The way forward for the retail partnership’s mutual standing has been known as into query after potential plans to promote a minority stake.
Hartigan declined to remark.
In a press release on his bonus, LV mentioned it had “fulfilled its authorized and contractual commitments” and all selections had been made “following agreed and stringent processes and with the help of authorized and remuneration advisers”.
The insurer’s full-year outcomes, printed on Thursday, confirmed working revenue flat at £31mn regardless of what it known as “tough financial situations” that weighed on urge for food for some funding merchandise.
Gross sales of annuities, nonetheless, jumped 91 per cent yr on yr. Rising rates of interest have made yields on these merchandise extra enticing.