Interactive Investor

FTSE 100 chief rewarded for breaking records

After hitting targets, this chief executive is raking it in. In fact, he’s making more than any other CEO at the firm in the past decade. Is he worth backing to do it again this year?

27th October 2023 09:06

Graeme Evans from interactive investor

Smiths Group has paid its boss a decade-high £4.2 million after a year in which the engineering conglomerate delivered record revenues and earnings growth.

Paul Keel’s total remuneration, which included an annual bonus of £1.25 million, also reflected year-on-year improvement on all five of Smiths Group (LSE:SMIN)’s medium-term financial targets.

Shareholders, who are due to gather for the company’s AGM in three weeks’ time, have benefited from a 10% share price rise and 5.1% increase in dividend to 41.6p a share.


When: 12 noon, Wednesday 15 November.

Where: UBS, 5 Broadgate, London EC2M 2QS.

How to participate: Proxy voting instructions must be returned by 12 noon, Monday 13 November. More AGM details can be found here.

Who’s in the chair? Former Compass chief operating officer Andrew Martin has been in the role since 2018.

How did the company do in the year to 30 June? Net fees increased by 6% on a like-for-like basis, or by 9% on a reported basis, to a record £1.29 billion. Operating profit decreased 9% on an underlying basis to £197 million and earnings per share (EPS) of 8.59p came in 7% lower. Hays (LSE:HAS) declared a 5% increase in its core dividend for the year to 3p a share, with a final dividend of 2.05p a share due to be paid on 17 November alongside a special dividend of 2.24p a share.

How have shares performed? Down 7% at 102.2p (93.4p on Thursday).

How much was the boss paid? Alistair Cox, who spent 16 years as chief executive, got £2.48 million in his final full year at the recruitment firm. His highest sum of the past decade was £4 million in 2015. For 2022/23 the annual bonus scheme paid £643,000, based on 52.14% of the maximum opportunity after the EPS metric was impacted by tougher conditions in permanent recruitment. The 80% vesting of long-term incentive shares contributed £877,000 to the overall figure, with Cox holding about £4.2 million of directly owned and unvested Hays shares by the end of the financial year. He will be paid a salary of £822,274 plus pension and benefits until the expiry of his 12-month notice period on 23 August 2024.

How much is the new boss paid? Dirk Hahn, who succeeded Cox as chief executive on 1 September, will receive a salary of £620,000. He also gets an annual bonus opportunity of 150% of salary and a long-term incentive award for 2023 worth 200% of salary. Hahn has 20 years’ experience with Hays, having led the key markets of Germany, Continental Europe, Middle East and Africa.

What’s in the new remuneration policy? A review of senior executive pay found the current approach supports the company’s strategic programme and that no substantial amendments are needed to the policy last approved with 91.47% of votes in favour at the 2020 AGM.

How did last year’s AGM go? The annual remuneration report was approved with 97.90% of votes in favour.

What’s the view of voting agencies? Glass Lewis recommends shareholders support the annual remuneration report and the binding vote on the new three-year remuneration policy.

How’s the company doing on diversity? The nine-strong board includes four female directors and two directors from an ethnic minority background. The percentage of female leaders rose from 42.4% to 44.3%, on track to reach a target of 50% by 2030.

Smiths Group

When: 11am, Thursday 16 November.

Where: Freshfields Bruckhaus Deringer, 100 Bishopsgate, London EC2P 2SR.

How to participate: A webcast is available but this is not interactive and it will not be possible to vote or ask questions remotely. Proxy voting instructions should be submitted no later than 11am, Tuesday 14 November. More AGM details can be found here.

Who’s in the chair? Sir George Buckley will retire from the board at the conclusion of the AGM, having held the role since 2013. He will be replaced by Steve Williams, who was chief executive of Suncor Energy from 2012 to 2019 and previously held senior leadership roles at ExxonMobil in the UK.

How did the company do in the year to 31 July? Revenues of £3 billion were 11.6% higher on an organic basis, leading to a 12.7% rise in operating profit to £501 million. The engineering conglomerate reported headline earnings per share of 97.5p, a record improvement of 39.6% over a year earlier. A final dividend of 28.7p a share is due to be paid on 24 November, resulting in a 5.1% rise in the total for the year at 41.6p.

How have shares performed? Up 10% at 1,699p (1,568.5p on Thursday).

How much is the boss paid? Paul Keel’s base salary increased by 5% at the start of this month to £941,719. His single figure remuneration for 2022/23 amounted to £4.28 million, the highest sum paid to the company’s chief executive in the past decade after exceeding the £4.19 million received by predecessor Philip Bowman in 2015. Keel’s total included an annual bonus of £1.25 million based on 70% of the maximum opportunity and the 75.6% vesting of long-term incentives worth £1.76 million.

How did last year’s AGM go? The annual remuneration report was approved with 96.01% of votes in favour.

What’s the view of voting agencies? Glass Lewis recommends shareholders vote in favour of the annual remuneration report.

How’s the company doing on diversity? The board comprises six men and four women, with two directors from an ethnic minority background.

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