THE chairman of North West Water defended his #325,000 annual salary
and a share option package worth several hundred thousand pounds before
MPs yesterday, dismissing Labour allegations of highway robbery as
misinformation.
Sir Desmond Pitcher clashed with the Committee's Labour chairman
Greville Janner over the use of share options to reward senior
executives of privatised utilities.
Asked repeatedly if he understood the public's concern over dramatic
pay increases for directors of the water and electricity companies, Sir
Desmond said the matter had been ''inflamed'' by politicians, and
refused to answer.
''I don't think the view which has been perpetrated widely is correct.
I get 22,000 letters per annum, 5000 personal ones, almost none are
concerned with share options,'' he said.
The public was being misinformed, and he blamed Labour and Shadow
Chancellor Gordon Brown, who on Monday released Labour's latest analysis
of executive pay packages in privatised utilities. ''The public are
concerned about the misconceptions being told,'' he added.
Labour claims 145 directors in companies ranging from British Telecom
to Scottish Hydro hold share options worth more than #100m. The figure
was calculated by multiplying the amount of shares held by their value
on Monday.
Sir Desmond angered Mr Janner by refusing to disclose the names of the
companies and organisations which received #60,000 in contributions from
North West last year, saying it was not relevant to the committee's
inquiry into executive pay.
Last year, Sir Desmond was paid #325,000, plus a #75,000
performance-related bonus. For that he worked full time as North West's
chairman, putting in a 50 to 70 hour week.
In addition, he received #1500 a month for the 45 hours a week he
serves as chairman of the Merseyside Development Corporation. However,
he said 45 hours did not equal a week's work and did not interfere with
his full-time commitment to North West.
On joining North West Water, he said, he took a 60% cut in
remuneration. He did not have a company car, a chauffeur, nor did he
receive gardener's services. North West Water does not offer its
directors an executive dining room.
His share option package, which allows him to buy a fixed number of
shares at a low price that he can then resell at the higher market
price, is based on 160,000 shares at 462p, and 54,000 shares at 393p.
Yesterday, North West Water's shares closed at 521p, giving Sir
Desmond a notional profit of almost #250,000. However, he said: ''We
would be disappointed with a director who exercised his options and took
the money. We would expect him to put the balance back into the
company.''
The confrontational tone continued through to the closing formalities.
When Sir Desmond said he ''enjoyed the meeting'', Mr Janner snapped
back: ''That wasn't what you were here for.''
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