Half million payout
Outrage over LV= CEO’s ‘reward for failure’
Mark Hartigan, the chief executive of LV=, has been awarded a half million pound bonus despite the mutual insurer’s failure to secure its sale to a private equity company.
The management also missed targets on customer satisfaction, staff engagement and investment returns, prompting one critic to describe the £511,000 payout as a “reward for failure”.
In December the board failed to persuade enough policyholders to support a controversial plan to sell the business to US private equity group Bain Capital. Subsequent ‘merger’ talks with Royal London also collapsed without agreement.
Gareth Thomas, chairman the all-party parliamentary group on mutuals and a critic of the demutualisation plan, said the bonus payment to Mr Hartigan was “outrageous”. It took his total pay for the year to just over £1 million.
Susan McInnes, chair of LV=’s remuneration committee, said it was based on the company’s “strong business performance” and Mr Hartigan’s good leadership throughout the Bain deal process.
Following the humiliating vote on the Bain Captial proposal which fell shy of the 75% required, chairman Alan Cook immediately announced his resignation and three other non-executive directors departed.
It was reported by The Times that the bill for external advisers on the aborted proposal came to £33 million.
Formerly known as the Liverpool Victoria Friendly Society, and now based in Bournemouth, the society’s annual report revealed missed targets for customer satisfaction and investment returns. It disclosed a serious decline in staff morale.