Executive pay can be fiendishly hard to calculate and even harder for the public to comprehend – and now it seems that the same is true for the owners of one of the biggest fund managers in the UK.
Legal & General, the insurance company, has been forced to admit that it made a mistake in the pay of its chief executive Nigel Wilson when it published its annual report almost 10 weeks ago.
In a statement to the stock exchange, L&G said it “regrettably advises” that the error had been made as it admitted Wilson was paid nearly £5.5m in 2015 rather than the £4.7m previously disclosed in the annual report in March.
The revelation, on the eve of L&G’s annual general meeting where investors will vote on the remuneration report, is embarrassing for the insurer which said: “We apologise for this error.”
As a result of changes introduced by Vince Cable when he was business secretary, companies are required to publish a “single figure” for pay which covers salary, benefits, annual bonuses and payouts from long-term incentive schemes.
L&G failed to include in the “single figure” for Wilson 291,765 share options, worth £781,000, that were released to him on 24 August last year. But he did not cash them in until January 2016. Under the rules they should have been included from the moment they vested, not when they were exercised.
The error was uncovered by Deloitte, which L&G uses as an advisor on pay. The accounts were audited by PricewaterhouseCoopers, which declined to comment.
This article was written by Jill Treanor, for theguardian.com on Wednesday 25th May 2016 11.34 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010