Director pay in focus at AI
ADMINISTRATORS to Aero Inventory (AI), the AIM-listed aero parts group that collapsed last week, are looking at ways to claw back money from the company’s directors amid concern over the level of pay and bonuses taken by key executives.
KPMG, which last week took control of AI on behalf of banks, owed more than £300m, is said to be dismayed at how much management was rewarding itself relative to the size and strength of the company.
Analysis of AI’s remuneration reports between 2005 and 2008 shows that total pay taken by directors rose six-fold from £582,000 to the equivalent of about £3.5m after the company began reporting in US dollars.
Chief executive Rupert Lewin, a former corporate broker for merchant bank Robert Fleming was paid $1.62 million (£971,000) last year, including a bonus of $594,000. In 2005, his total remuneration was a more modest £146,000 ($244,000). Finance director Hugh Bevan saw his pay and bonus rise from £112,000 to $625,000 during the same period. Both men resigned when KPMG took control last week.
The company, which had divisions in the US, Canada, Hong Kong, Japan, Bahrain and Australia, had been growing at a rapid rate but earnings per share rose much more slowly, from 53c (31p) to 102c. AI had stated assets of $750m and debts of $500m when it went under.
Cracks in the company began to appear ahead of the company’s planned move from the junior market to a main market listing. A review found that the value of
AI’s stock was substantially overstated and some assets did not even exist.