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As Sir Philip Green faces MPs...

Top firms pay dividends higher than their pension deficits

DividendsMore than half of the biggest companies in Britain paid dividends to their shareholders at least equal to their pension scheme deficits.

Some of the biggest paid investors more than the size of their retirement fund shortfall.

The analysis raises questions about boardroom priorities as companies put investors’ interests ahead of their employees.

It also emerges on the day that former BHS owner Sir Philip Green faces MPs to answer questions over the collapse of the retail chain and why he allowed the company’s pension deficit to balloon to £600 million while paying his wife hundreds of millions in dividends.

Research by investment company AJ Bell shows that 54 of the FTSE100 companies paid out £48 billion in dividends in each of the past two years, almost equal to the £52bn total deficit in their pension schemes.

They include 35 which paid out more in dividends than their pension deficit. Eight of the 20 companies with the largest pension deficits paid out more in dividends than their deficit.

The firm said the analysis raises questions over whether public companies have got the right balance between shareholder payouts and funding for their staff pension schemes.

Pension deficit (£m)

Dividend (£m)

2014

2014

2015

2016 E

Royal Dutch Shell

-6,739

7,531

7,999

10,253

AstraZeneca

-1,870

2,169

2,376

2,450

GlaxoSmithKline

-1,689

3,894

3,894

3,897

Rio Tinto

-1,688

1,857

1,969

1,145

National Grid

-1,276

1,605

1,635

1,673

Glencore

-686

1,655

547

37

British American Tobacco

-628

2,761

2,871

3,049

Vodafone

-549

2,979

3,040

3,022

Legal and General

-494

669

797

842

Imperial Brands

-474

1,228

1,352

1,490

Diageo

-473

1,300

1,419

1,468

WPP

-295

495

579

674

Standard Chartered

-234

1,415

235

153

Capita

-193

194

211

224

United Utilities

-177

257

262

268

Compass

-176

436

484

520

Reckitt Benckiser

-167

984

984

1,005

Anglo American

-159

756

293

12

Mondi

-148

153

196

217

Johnson Matthey

-117

139

149

148

Smith & Nephew

-115

177

186

198

Kingfisher

-100

229

232

241

Travis Perkins

-81

95

110

126

InterContinental Hotels

-71

115

137

156

Bunzl

-70

119

127

138

SABMiller

-49

1,166

1,273

1,381

BHP Billiton

-48

1,547

1,697

516

Hammerson

-40

160

175

188

Associated British Foods

-31

269

277

289

Intertek

-25

79

84

92

London Stock Exchange

-23

107

125

142

Sage

-14

131

141

150

Morrison (Wm)

-11

319

108

121

Fresnillo

-9

37

27

63

Persimmon

-1

291

337

338

*The analysis compares data published by Lane Clark & Peacock on FTSE 100 deficits taken from 2014 full-year accounts with dividend data sourced by AJ Bell from Digital Look.  The analysis covers firms that were members of the FTSE 100 in 2014 and remain members today.



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