US hedge fund slams top pay at First Group
MANAGEMENT pay at First Group was slammed yesterday by Tom Sandell of New York-based hedge fund Sandell Asset Management, as he said the management team of the UK rail and bus operator had been “well rewarded for failure”.
The comments came in an open letter from Sandell to John Macfarlane, chairman of the board of directors of First Group. Sandell said that First Group’s chief executive renumeration package had risen by 209 per cent in the last five years, with Tim O’Toole the highest- paid CEO among his peers. Yet he claimed that during this five-year period First Group’s share price performance was the worst among it peers with minus eight per cent return, compared to a positive return of 239 per cent for its peers.
The letter will increase pressure on the FTSE 250-listed First Group, which did achieve a return to profit last year, but which failed to secure franchises including Thameslink.
Next month will see First Group’s annual meeting on 16 July, at which voting will take place on the company’s renumeration report. Sandell stated he will vote against it and encourage other shareholders to do likewise.