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IT WOULD seem the greed of British Waterways eight executive directors knows no bounds, writes Allan Richards.
Not content with paying themselves unauthorised bonuses, that is now the subject of an e-petition, they intend to give themselves massive cash handouts.
Enormous salaries
It is the enormous salaries that usually hit the headlines with Chief Executive, Robin Evans, on a substantial £222,000. But basic salaries are just the start. British Waterways directors also enjoy taxable benefits of up to £14,000 a year and can be awarded bonuses of up to 30% of basic salary (40% for chief executive).
One would think that on these astronomical salaries, directors would be expected to make their own pension provision. No so. They are all aboard the pension gravy train. And its first class all the way!
High earners
For many years, in the United Kingdom, high earners have taken advantage of pension rules as a tax avoidance measure. In short, it is possible to pay large amounts into a pension fund to avoid tax at the higher rate on salary.
To the 'man in the street' who just might be lucky enough for his employer to contribute 15% of his salary to a pension scheme, the pension part of British Waterways' directors remuneration packages is simply mind blowing.
Not 15% but 150%
British Waterways' annual report for 2009/10, tells us that that its contribution to chief executive, Robin Evans, pension was 150% of his basic salary of £222,000. No, that zero on the end is not a misprint! On top of his basic salary of £222,000 he was paid £333,000 tax free via his pension fund.
Of course, it could not last, and government have reduced the cap on both the maximum amount that can be held in a pension fund and also the tax fee amount that can be paid into a fund in any one year.
£1.5m saved
This is the reason British Waterways' contribution to Robin Evans pension fund dropped from the astronomical to the merely massive last year. It reduced from £333,000 to £47,000 saving the taxpayer some £286,000.
Indeed, taken across all directors, government's action saved the taxpayer some £1.5m last year. It took a reasonable step in the direction of reducing the British Waterways fat cats remuneration to that enjoyed by the charitable sector and gave it the ability, subject to government guidelines, to give staff a modest increase or retain some of those who were made redundant. However, it seems that British Waterways was more interested in propping up its failing pub joint venture and buying marinas than investing in its staff or its waterways. Some things never change!
Fat cats fight back
Unfortunately, the fat cats have not taken an average £200,000 a year (tax free) reduction in remuneration lying down. In February this year, British Waterways' remuneration committee decided that any director who has exceeded the pension cap of £1.5m can simply take the money as a tax free lump sum.
But much worse, they agreed that director's pension benefits removed by government will be reinstated. The money that can no longer be paid into directors pension funds because of government caps will be paid direct as a lump sum on the pretext that the director now has to make his own pension provision.
Opportunity missed
At face value, it seems that British Waterways' directors have been given an opportunity to demonstrate that they are willing to reduce salaries to a reasonable level by accepting the government cap. However, British Waterways have insisted that director remuneration levels are maintained, and are no doubt gutted that they will have to pay tax on the £3m payout to compensate for loss of pension contributions last year and this year.
2010 AGM
At British Waterways' 2010 Annual meeting, Robin Evans stated as part of his address:
"Some of you make great play of NWC being a completely new organisation, one that is not British Waterways dressed up in new clothes, not British Waterways as we know it today. I understand why you want to make the distinction, and I agree NWC has to be different in many respects but I don't think you understand how demoralising it is to the 1,700 people who are employed by British Waterways today and will almost entirely make up the staff of NWC."
Sorry, Mr Evans, you cannot put that one on the public who have nothing but the highest regard for front line staff. But let us turn the question round.
Demoralising
Do you, Mr Evans, understand how demoralising it is for your own staff and the public to find that British Waterways' directors will not accept responsibility for the current parlous state of our waterways by taking a cut in remuneration, but expect us to shoulder the burdens of mismanagement?
What will your staff think now that they know that, in addition to your unauthorised bonus of £15,000 you will be getting over £550,000 as a lump sum payment?
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