How would you react if you heard your boss was planning to give himself a bonus worth 10 times his base salary? Well, that’s the news that employees – and investors too – have to swallow about London-based insurer Old Mutual’s CEO Bruce Hemphill.
However, the company is apparently confident that investors are prepared to give the thumbs up to the news – with Bloomberg
reporting that representatives from the firm spent three days in both Johannesburg and Cape Town meeting more than 20 shareholders to discuss the possibility, canvassing holders of around 50 per cent of the firm’s stock.
Hemphill joined the firm in November last year and back in March outlined plans to break the company into four separate units by 2018. The idea behind the move is that the firm will no longer trade at a discount to the combined value of its different businesses. Now, however, Bloomberg
is reporting that the CEO, who is estimated to earn around £900,000 a year, could now be set to pocket more than £9 million for breaking the group apart.
Speaking about the decision, Danuta Grey, an independent non-executive of Old Mutual and chairman of the remuneration committee, told the newswire that “the whole plan is premised on replacing three years of rewards and also takes into account that Hemphill is working himself out of a job.” She further commented that Hemphill is “the right guy to deliver.”
Old Mutual began trading in London back in 1999 and in close to 17 years its stock has only increased by 13 per cent – the third worst performer among the eight FTSE 350 Life Insurance Index members.
Old Mutual division set for South Africa switch