The Pensions Regulator has been urged to target the £16.8m earned by six former Carillion directors over 10 years to help fund the collapsed firm’s pension deficit.
Carillion joint inquiry co-chair Frank Field has called on the The Pensions Regulator (TPR) to use its powers to claim money from the firm’s former bosses as it investigates the £800m pension shortfall left by the failed contractor.
In a letter to the regulator, Mr Field said: “The Carillion directors continued to line their pockets as the pension entitlements of their workforce evaporated, with the [Pension Protection Fund] due to shoulder the staggering pension deficit they left behind.
“It appears though that TPR could set its sights on more than those ill-gotten gains, and go after the directors it finds responsible for everything they’ve got.”
In his letter, Mr Field highlighted the £16.8m received by six former directors between 2007 and 2016.
TPR is currently investigating whether the firm’s executives avoided paying into Carillion’s pension funds.
If that is found to be the case, it could issue a contribution notice to the former bosses and order them to pay their own money into the scheme or the Pensions Protection Fund (PPF).
Six Carillion directors targeted
In his letter, Mr Field identified six Carillion directors and what they had recevied in salaries, benefits and bonuses:
- Richard Adam, CFO, April 2007 to December 2016 – received £8.3m
- Richard Howson, CEO, December 2011 to July 2017 – £7.2m
- Philip Green, chairman, May 2014 to January 2018 – £709,000
- Andrew Dougal, audit committee chair, October 2011 to January 2018 – £316,000
- Alison Horner, remuneration committee chair, June 2014 to January 2018 – £182,000
- Keith Cochrane, interim CEO July 2017 to January 2018 – £89,000
Mr Field did not include Carillion’s final two CFOs, Zafar Khan and Emma Mercer, in his list.
The PPF has picked up the bill for the collapsed contractor’s £800m pension deficit.
An analysis by EY commissioned by Carillion in December 2017 found that if the company collapsed, the PPF could receive as little as £12.6m from the liquidation.
TPR had been involved in negotiations between Carillion and its pension trustees from 2008 up until the company’s liquidation in January.
Over this time the deficit ballooned from £237m in December 2008 to an estimated £800m when the firm collapsed.
TPR argued it had secured extra contributions to the pension fund during the time, but its efforts were branded “feeble” by the Carillion joint inquiry.