The man running alternative business structure (ABS) Quindell Portfolio saw his pay more than double to nearly £900,000 last year, the company’s annual report has revealed.
It has also put the full cost of Quindell’s purchase of three law firms last year at £45m.
Rob Terry, the chairman and chief executive, received £890,000 in 2012, compared to £407,000 the year before. His basic salary more than trebled from £114,000 to £402,000, while his bonus jumped from £293,000 to £488,000.
In a statement to Legal Futures, the company said: “Quindell has a remuneration committee that has delegated responsibility for making recommendations to the board regarding the remuneration and other benefits of the executive directors and senior executives. This consists exclusively of independent non-executive directors.
“The board’s intention is to combine appropriate levels of fixed pay with incentive schemes that provide executives with the ability to earn above median levels for true out performance and which encourage executive co-investment in the company’s shares.
“As you will have seen from the performance of the group in the past year, the board, including Rob, succeeded in driving revenue growth of 904% to £137.6m (2011: £13.7m), delivered a 915% increase in the profit before tax to £41.2m (2011: £4.61m) and oversaw the successful integration of a number of major acquisitions.
“It is important also to note that the board and management’s interests are aligned with shareholders by having executive bonuses and share options targeted on EPS [earnings per share] levels.”
Mr Terry holds 683m shares, nearly 17% of the company, the value of which has halved since the end of 2012. Quindell’s share price was 17p on 31 December 2012, and closed on Friday at 8.55p. It nonetheless represents something of an improvement following a major run on the company’s shares last month – for which the board said there was no reason – that saw them dip as low as 6p.
The acquisitions of Silverbeck Rymer, Pinto Potts and The Compensation Lawyers cost £45.2m, made up of £30.1m in shares and £13.5m in cash, plus £1.5m in deferred cash for the vendors of Pinto Potts depending on performance, which Quindell expects to pay in full in October.
With the deals bringing in £16.5m in net assets, the annual report said this left £28.7m in goodwill arising from the acquisitions: “[This] represents the value to the group that can be driven from these underlying assets over the life of the acquired business and comprises the value of expected synergies arising from the acquisition together with the workforce, which is not separately recognised.”
The report recorded income from legal services in 2012 of £34.3m, and said that to ensure margins stay the same in wake of the Jackson reforms introduced on 1 April, it will “agree where possible to charge a percentage of damages on successful cases to the claimant”.