BAE Systems hands CEO £2m to stop him leaving
Defence contractor says CEO critical to international business orders
Defence company BAE Systems has given its chief executive a £2m ‘golden handcuffs’ pay package to prevent him being poached by a rival company.
The FTSE 100 manufacturer has added a bumper bonus in shares on top of a £100,000 rise in Charles Woodburn’s base salary.
The board is is said to have received support from shareholders on the matter.
In its annual report the company said: “Based on close examination of both the defence industry and FTSE-50 median reward levels, it had become increasingly clear that Woodburn’s current remuneration no longer reflected his value to the company or standing in the market.”
The pay increase, a 13% rise over two years, was described as a “one-off” offer, with 50-year-old Dr Woodburn’s annual salary being increased to just over £1.1m.
A performance share award granted in 2018 will vest in full, with the shares being handed to him at the end of 2023 if he remains with BAE at that time.
Investors said that BAE’s board, chaired by Sir Roger Carr, believed that the loss of Dr Woodburn would risk destabilising the company as both its finance chief and the president of its US operations had both been recruited in the previous 12 months.
Dr Woodburn has been at the helm of BAE since 2017, but he was approached by an unnamed major international UK-based public firm at the end of last year.
An early departure could also potentially damage complex international business and affect important government customer relationships, BAE warned.