Big payout for executive
Former Carillion FD cashed in as firm sank
Carillion’s FD cashed in his shares before the company collapsed
Carillion’s former financial director Richard Adam sold shares worth three-quarters of a million pounds just before the construction company issued dire warnings about its finances.
Mr Adam retired on 31 December 2016 and on 1 March 2017 he sold his entire existing shareholding for £534,000, including performance awards for 2013-2015 of £277,000 which vested on his retirement.
He sold his long term incentive plan awards for 2014 on 8 May, the day they vested, for £242,000.
In total, in March and May 2017 he sold shares (now worthless) worth £776,000.
Mr Adam was noted in evidence to the joint committees of MPs investigating Carillion’s collapse, published on 23 February, as regarding funding the pension scheme as a “waste of money”.
His successor as FD, Zafar Khan, had his contract terminated after just eight months in the job, on 8 September, having “spooked” Carillion’s board with a financial update a few days earlier that showed there had been a further decline in the company’s position since the “shock” £845 million contract write down in July 2017.
Mr Khan has argued that it is surprising that the board were “spooked” by his update, as it “should have been apparent to the board by then that the company was struggling to improve both its net debt and profit positions.”
Frank Field, chairman of the Work and Pensions Committee, said: “Mr Adam presided over Carillion’s finances for a decade.
“He, more than anyone else, ought to know the merits of Carillion shares as a long term investment in the light of his lengthy and lucrative tenure.
“His assessment? Dumping the last of his shares at the first possible moment because he is – with his own money at least – ‘risk averse’. What conclusions are we to draw from that?
“The other directors appear keen to set up the hapless Zafar Khan as the fall guy for the collapse. It is not lost on us, however, that he inherited Carillion’s mountain of debt.”