Poor old Bill Brown. The age of austerity has finally caught up with the fast car-and turf-loving chairman of Walsham Brothers, the Lloyds broking firm. With a 1989 salary of £8,136,274, or £22,291 a day, Brown earned the enviable title of Britain's highest paid director. But an exclusive peek at the 1990 accounts shows that his pay cheque has been savaged by a hefty £791,533 cut. At £7,344,741, or a mere £20,122 a day last year, Brown's salary still assured him the top spot, while bumper profits meant bumper dividends too. The family business made £35.6 million pre-tax on £36.34 million turnover (a 98% profit margin), so Bill took £1,792,115 in dividend payments, along with brothers Ron and Jim - though they make do with more modest pay cheques of around half a million apiece. Nevertheless, if the short-term has been good, the long-term outlook is rather less rosy; hence, perhaps, Brown's eagerness to cash in while he can. For Walsham is the undisputed leader in the LMX market (London Market Excess), where it re-insures risks taken on by fellow Lloyds underwriters. But this market has been hit by a series of disasters like the Exxon Valdez spillage in Alaska.
ln his annual report, Brown warned of tough times ahead: 'After a period of significant growth there is concern that this market may now be in decline,' he notes. 'Some operators are considering their position and may cease to support this market in future.
The prevailing climate of caution apart, Brown's personal star may be falling. His good fortune so far has hardly endeared him to Eddie Kulukundis, theatrical agent and husband of actress Susan Hampshire.
Kulukundis has already publicly called for a Lloyds inquiry into the way that Walsham dominates the LMX market, and particularly the business of Lloyds syndicate Feltrim, whose members include Edward de Bono, Sir Simon Hornby, the W. H. Smith chairman, and until his death, Robert Maxwell.
Some 80% of Feltrim's re-insurance was handled by Brown. Yet, in the years 1987 to 1990, Feltrim's losses resulting from the string of disasters, totalled £380 million or an average of £95,000 for each one of the 4,000 members. Irate members wanting to contact Bill Brown about the size of his commissions may care to look for him at his usual, aptly-named watering hole, the City Flogger.