Majority of Greene King bosses see pay drop

The majority of Greene King executive directors saw a drop in pay in 2008-2009 compared to the year before.

Chief executive Rooney Anand earned a basic of £462,000, a bonus of £176,000 and non-cash benefits of £29,000 to earn a total of £667,000, compared to £798,000 the year before.

Finance director Ian Bull earned a basic of £306,000, a bonus of £112,000 and non-cash benefits of £20,000 to earn a total of £438,000 compared to £508,000 the year before. Tenanted director David Elliott earned a basic of £266,000 and a bonus of £28,000 plus

non-cash and cash benefits of £19,000 to earn a total of £313,000 compared to £337,000 the year before.

Jonathan Lawson, who runs Greene King's wet-led managed pubs, earned £202,000 plus a bonus of £38,000 and cash and non-cash benefits of £13,000 to earn a total of £253,000 compared to £369,000 the year before.

Brewing division boss Justin Adams bucked the trend. He earned a basic of £232,000 and an annual bonus of £161,000 and non-cash benefits of £24,000 to earn £417,000 compared to £305,000 the year before.

Chairman Tim Bridge earned £189,000 compared to £186,000 the year before. Greene King executive directors are eligible to receive an annual incentive bonus up to 100% of annual pay for the achievement of "stretch targets".

The targets are a combination of personal and financial performance objectives agreed in advance by the remuneration committee, with the financial targets relating to operating profit and profit before tax and exceptional items and specific business unit related targets.

Targets are set before the start of the year and then being subject to a mid-year review to take account of the effect of changes to the size of the estate following acquisitions and investments since the start of the year, internal transfers and changes in market

conditions (with adjustments made up or down to ensure that they remain appropriately challenging).

At this half-year review, the remuneration committee took the view that there had been such a "sharp and unforeseen" change to the external economic situation which had created such unprecedented trading conditions in the pub and hospitality trade that the performance targets set for the majority of executive directors had been mis-calibrated and could conceivably encourage undue risk-taking in suggesting to executives

that such targets remained appropriate.

Adjusted targets​

It was decided that the targets should be adjusted to reflect the current state of the market so as to encourage Greene King executives to deliver improved performance against stretching second half targets for the financial year.

In addition to setting revised targets, the available quantum was scaled back below 100% of salary for the remaining period. In cases where targets were adjusted, it was decided that one-third of any net bonus payment paid should be in shares and deferred.

This "stretches" the time-horizon of the bonus over the deferral period to help ensure that the value of any bonus earned based on financial performance in the second half of the year would be impacted by future performance (affecting the value of the shares) encouraging a longer-term perspective.

This would also reduce the risk profile of the bonus plan and act as a lock-in mechanism, as the deferred shares will be forfeited in the event that the relevant director leaves the group, other than as a "good leaver", before the end of December 2010.

The bonus payable to Justin Adams was not subject to deferral as his original business unit targets were considered sufficiently achievable and yet still challenging in the current climate and were therefore left unchanged.