Consumer goods group Reckitt Benckiser revealed yesterday that its CEO Bart Becht took home a quite extraordinary £90m in 2009. This included nearly £1m in salary, £3.5m in bonus, and a whopping £87m from the exercise of various share options – and means Becht has now pocketed over £200m in the last five years. Reckitt rightly points out that he’s done a remarkable job during the period, delivering unbelievable returns to shareholders - and he's been very generous with his wedge. But that’s still an awful a lot of money for flogging detergent. And as Richard Lambert highlighted recently, huge executive pay packets like this don’t exactly chime with the public mood...
Becht was already the FTSE 100’s highest-earning CEO, taking home £37m or so in 2008. But he more than doubled that last year, after making £74m by exercising some share options he was given back in 2001, and another £13m by cashing in some performance-related shares he found down the back of the sofa. Throw in salary, bonus and health insurance (plus a company car and his children’s school fees!) and his total package topped the £90m mark – smashing all previous records for CEO remuneration.
It’s true that Becht has given a sizeable chunk of this away; Reckitt said yesterday that he’s donated about £110m to his charitable trust. And it must also be said that if anyone deserves a big performance-related bonus, it’s Bart Becht. The Dutchman has been at the helm of Reckitt Benckiser since its creation in 1999, and during the subsequent decade, the company has delivered a total return to shareholders of 649%. In the last five years, its value has grown at five times the rate of the FTSE 100 as a whole. And last year, during the nastiest recession in living memory, it boosted profits by 26%. That’s a pretty remarkable showing for a consumer goods group.
Nevertheless, it’s still an uncomfortably large sum of money. CBI boss Lambert said on Tuesday that bosses risked being viewed as ‘aliens’ living in ‘a different galaxy from the rest of the community’ because of how much they earn – and that this was damaging the reputation of business as a whole. According to the Times, the average Reckitt employee would need to work for 2,238 years to earn this much money. And how much of its outperformance is down to him personally, as opposed to all the scientists, marketers, salesman and others that work for him? However well Becht has done, we find it hard to believe that one person can be worth this much money. And even if he is, we’re not sure it’s very politic for big public companies to be paying it at the moment.
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Rose goes out with a bang as M&S beats forecasts with 5% hike
Reckitt boss Becht cleans up with £90m annual pay packet
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