FBD pays ex-boss Langford €180,000 in consultancy fees, after €85m loss
FBD is paying its former chief executive €16,300 a month in consultancy fees, in spite of the insurer’s “unsatisfactory” financial performance last year.
The Group recorded a loss before tax of almost €85m in 2015.
Last July, Chief Executive Andrew Langford resigned after 19 years with the Group, saying he believed it was the right time for someone else to lead FBD through its next stage of development.
FBD paid Langford €594,000 during 2015, including €269,000 pay in lieu of notice under his contract of employment.
Despite being mostly at the helm during one of FBD’s worst financial performances in its 45-year history, according to FBD’s annual report released yesterday Langford “agreed to make his experience and services available to the Company from February 1, 2016 until December 31, 2016 for a fee €16,300 per month so long as he was not in full-time employment elsewhere.”
This will result in an estimated income by Langford by FBD of €179,300 in 2016.
According to the Chairman’s statement in the annual report, Michael Berkery said, “As your chairman, it is with regret that I report our overall financial performance in 2015 was so unsatisfactory.”
In 2014, Langford received €538,000 from the company, according to the report.
Langford was replaced by board member Fiona Muldoon in October, who joined the Group in January 2015 as Group Finance Director Designate. Muldoon was paid €449,000 by FBD in 2015.
Founded in the 1960s by farmers for farmers, FBD’s stated financial aspiration for 2015 was to “prioritise profitability over volume.” This resulted in an almost 9% rise in premiums last year, according to the report.
The net result is that gross written premium levels remained stable from 2014 to 2015, at €363.3m, out of total revenue of €403m.
‘Deteriorating Claims Environment’
The Group also recorded a total prior year claims reserve of €96m and a 2.2%, or €20.3m, investment return.
2015 also saw the sale of the Group’s 50% interest in the FBD Property & Leisure Ltd joint venture for €48.5m to its joint venture partner, Farmer Business Developments.
In light of what the Chairman described as the “deteriorating claims environment” the board decided early in 2015 that no interim or final dividend would be paid for 2015″.
The loss per share from continuing operations for 2015 was 213c, compared to 13c in 2014.
“During the second half of 2015 the Group delivered on the important capital and strategic initiatives previously announced,” Muldoon said in the report.
“There remains further work to return the business to profitability and we have set our business firmly on that path.”