pounds 5m pension for Cedric Brown
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Your support makes all the difference.BRITISH GAS chief executive Cedric Brown could receive a pension worth a total of pounds 5.5m after a secretive deal which will raise his annual entitlement to pounds 316,000 on retirement. David Jefferies, chairman of the National Grid, could get a total of pounds 2.9m.
Yesterday Shadow Chancellor Gordon Brown said he intended to raise the "appalling" sums due to the privatised industry bosses with John Major when the Prime Minister returns from the Madrid summit.
Details of the multi-million pound deals were revealed by Mr Brown's Shadow Treasury team yesterday. The estimates were based on the calculating procedures of leading actuaries.
Labour claims that industry and government have been trying to wriggle out of the requirement that companies disclose the full cost of pensions, which was the most radical suggestion in this year's Greenbury report on executive pay, which was meant to dampen down the "fat cat" scandal.
Huge pay rises for industrialists have led to correspondingly enormous increases in their pension entitlements. The extra benefit will be met from company pension funds, parts of which have been built up by the contributions of low-paid employees and workers sacked by utilities directors. Cedric Brown has presided over the loss of 30,000 jobs at British Gas. Last year he received a 75 per cent pay rise, which took his salary from pounds 270,000 to pounds 475,000.
Mr Brown, 60, is entitled to a pension of two-thirds of his final salary when he retires. The hike in his pay means that his annual pension will be pounds 316,000 instead of pounds 180,000. The estimated cost to the fund of his retirement, based on standard pension industry calculations and assumptions, has risen from about pounds 3.5 million to pounds 5.5m, Labour says. The pounds 2m increase is so large that it cannot be met by Mr Brown's contributions to the fund, which at present stand at pounds 19,000 a year.
A British Gas spokeswoman said that the rules that applied to Mr Brown were the same as applied to any other employee with 40 years service. A spokesman for the National Grid said the company did not comment on its employees' pensions. But he said it disclosed all forms of remuneration to directors in its prospectus.
Gordon Brown said he would demand to know why "these extraordinarily generous pensions" had not been disclosed after the Greenbury report.
"The country will be rightly appalled by the fact that the privatised utility bosses continue to pay themselves huge pensions, while the general public still has no right to know how much they are giving themselves," he said.
Labour said that of the 24 private utilities in the top 250 companies, only one had implemented the full Greenbury recommendations.
Feast for the rich, page 18
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