Spring board: no ‘fat cats’

04-Feb-2009 | By Colin Cottell

Ever since the then British Gas chief executive, Cedric Brown, was roundly pilloried in the press, after receiving a 75% pay increase to £475,000 a year, the issue of boardroom ‘fat cats’ has never strayed far from the headlines.

Few directors want to be seen as having their hands in the trough, particularly when their staff are facing the prospect of pay freezes or worse still, redundancy.

Speaking to Recruiter after Spring’s relatively upbeat trading update, Peter Searle, the group’s chief executive, expanded on the board’s decision in November not to give its members a salary increase or to pay themselves a bonus.

“It would have been inappropriate to take a bonus, given the loss of 100 of our staff and others getting no pay increase. It would have been a very difficult conversation with people in branches if they had had to let administration staff go,” Searle explained.

While Spring’s board is obviously sensitive to the views of staff in the company and the message it sends out particularly in these troubled times, it remains to be seen how many other boards will respond in a similar fashion.

Pinnacle Staffing Group reported that it expected turnover for 2008/09 to be 12% down on 2008 at around £38m. In a trading update, the company attributed the fall to a £7m reduction in turnover at Medical Services, following the withdrawal from a major master vendor agreement.

However, the company said it “continues to trade within its existing bank facilities”, and “remains in compliance with its banking covenants”.