500,000 pounds Severn Trent payoff to ex-chairman infuriates shareholders
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Your support makes all the difference.SEVERN Trent shareholders condemned a pounds 500,000 payoff to its former chairman at the company's annual meeting yesterday.
Shareholders demanded to know why John Bellak resigned and why he was paid on top of his salary of pounds 230,000.
The remuneration deal was because Mr Bellak had more than two years to run on his contract, said Richard Ireland, chairman.
He said the company was legally obliged to make the award of pounds 404,829 plus pounds 107,779 for pension contributions. Mr Ireland said: 'He (Mr Bellak) was required by the company to take retirement before the normal retirement age of 70.' Shareholders wanted to know why, but Mr Ireland refused to discuss the resignation in detail.
Mr Bellak is thought to have been eased off the board after disagreements about company strategy, particularly its rapid expansion into non-core activities.
Farmer Marcus Wilesmith, 49, of Malvern, Worcestershire, told Mr Ireland: 'Your failure to provide an answer is evidence to me that there is something here leaving a foul taste in people's mouths.' Another said: 'I can only assume Mr Bellak fell short in some way and was rewarded with half-a-million quid.'
Mr Ireland refused to rule out future huge payouts. 'Managing a water company is demanding. Severn Trent has to compete for recruits, retain them and motivate executives of the right calibre. The remuneration committee feels that the pay of directors is appropriate.'
Ofwat, the water industry watchdog, appeared unperturbed about criticism from the Labour Party and some consumer groups that its review of water prices was not tough enough. Staff at the regulator's offices in Birmingham were celebrating the end of the review process, although some of the companies have yet to accept the new price controls that will keep average increases in household water bills to 1 per cent above inflation for the next 10 years.
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