Table of Contents

Revealed: the top 20 best paid construction plc bosses

The trade’s highest earners have as soon as once more seen their pay rocket, after COVID lockdowns introduced a yr of restraint. James Wilmore examines how the rises sit inside a context of rising worries over the price of dwelling for these additional down the foodchain.

Current occasions in Westminster have demonstrated that the phrases “govt pay” and “bankers’  bonuses” stay extremely poisonous for politicians.

Liz Truss appeared to suppose that the sands had shifted. She assumed energy making an attempt to distance herself
from current predecessors by adopting a Thatcheresque extremely free-market method to the economic system.
However after dealing with outrage from markets, public and MPs, chancellor Kwasi Kwarteng was compelled to drop plans introduced in his ‘mini Funds’ to scrap the 45p high fee of revenue tax. Though there has not but been a reversal of the transfer to scrap the cap on bankers’ bonuses.

The temper music nonetheless feels very totally different to Theresa Could’s 2017 vow to sort out company extra
and the “unacceptable face of capitalism”.

Andrew Speke, a spokesman for the Excessive Pay Centre, tells Development Information: “I don’t suppose we’ve seen a authorities within the present political period that’s so snug with these on the high incomes tons.”

Salaries earnt by the highest rung of earners within the UK building sector are properly beneath these discovered
in lots of different industries.

Nonetheless, a CN evaluation of govt pay at listed building corporations – based mostly on their
newest revealed annual reviews – reveals that, following a COVID-related dip, govt pay is as soon as extra on the rise. At a time of nice cost-of-living worries, and requires pay restraint by the Financial institution of England, the chasm in pay between these on the high and the remainder of the workforce seems starker than ever. (See beneath for full high 20 desk).

Bouncing again

The trade’s high earners have seen a significant bounceback after a interval of pandemic-related restraint.

Most annual reviews cowl the calendar yr 2021, throughout which era the typical complete package deal awarded to the highest 20 best-paid executives was £1.25m – a 66 per cent bounce over the earlier yr. In complete, the sector’s high 20 executives secured round £25m in contrast with a collective sum of about £15m the yr earlier than. A lot of this was pushed by high executives seeing their annual bonuses restored.

Development was not alone in seeing a rebound in govt pay. FTSE100 chief executives noticed their total remuneration bounce by 39 per cent in 2021 to a median of £3.4m, in keeping with a examine by the Excessive Pay Centre think-tank and the Trades Union Congress. The median common of £3.4m in contrast with £2.5m in 2020.

Remuneration committees clearly felt snug with turning the faucets again on in 2021 as a point of normality was restored. “I feel there was an urge for food particularly for these [firms] who had tightened their belts throughout COVID to return to regular and make up for it,” says Speke.

In building this got here in opposition to a backdrop of companies gaining stability after the preliminary shock of COVID-19. This year’s CN100, published last month, revealed that pre-tax revenue was up by a median of 25.4 per cent among the many trade’s largest 100 companies as an easing of restrictions helped reinvigorate delayed tasks, boosting the sector’s total confidence.

Greatest risers

So which executives benefited in 2021? The best riser was Kier boss Andrew Davies, who leapt 9 locations to sixth within the desk. Since becoming a member of the trade large in April 2019, when there have been fears for its future, Davies has efficiently steadied the ship. The group returned to revenue final yr, though its share value has remained within the relative doldrums. The agency’s turnaround effort additionally noticed chief monetary officer Simon Kesterton are available in as the best new entry, inserting seventh on the checklist.

Davies’ total package deal greater than doubled to £1.3m. This was helped by selecting up a bonus of £669,000, in contrast with zero the yr earlier than.

Kier’s remuneration committee justified the award because it mentioned in opposition to a “difficult backdrop” Davies had “efficiently led on creating a robust operational platform for sustainable worthwhile progress and producing free money circulation, while simplifying the group and strengthening the stability sheet”.

Kier is clearly eager to hold on to Davies and reward him for his efforts. From July final yr his primary wage elevated 26 per cent to £750,000. The remuneration committee mentioned it thought-about staggering the rise over a number of years however determined to behave to get his wage as much as a “stage that displays the scale of the job and is adequate to retain and encourage him, reasonably than making incremental, much less impactful will increase”.

Prime slot once more

The agency’s committee will possible have had one eye on its bigger rival Balfour Beatty, whose boss Leo Quinn retained high spot within the checklist. Balfour’s chief govt pocketed a primary wage of £800,000 in 2021, up from £773,333 the yr earlier than. Quinn had taken a voluntary 20 per cent minimize in primary pay in April and Could 2020 because the market seemed unsure initially of the pandemic. Whereas this has been restored, he has declined a suggestion from the agency’s remuneration committee to extend his primary pay by 1.5 per cent.

His wage stays on the identical stage as when he was appointed in 2015. Nonetheless Quinn’s total package deal final yr elevated 30 per cent to £2.9m. This was pushed by a 30 per cent rise in his money bonus to £510,000 and a 58 per cent improve in his award for long-term incentives to £941,774.

“As the corporate and the nation emerges from the consequences of the pandemic, Balfour Beatty has continued to ship a robust monetary restoration with outcomes returning to 2019 pre-pandemic ranges,” Anne Drinkwater, chair of Balfour’s remuneration committee, says in its annual report.

Quinn’s total compensation continues to be significantly decrease than his 2018 package deal, which was £4.3m. The yr earlier than that his complete remuneration stood at £5.4m.

Balfour’s boss has come out high of this rating annually since CN began it in 2018. However after being a great distance forward of different executives beforehand, this time he had a challenger in John Morgan, co-founder of Morgan Sindall.

Morgan’s total package deal jumped 153 per cent to £2.77m, transferring him from fifth to second within the desk, the place he held two years in the past.

Helped by a pointy rise within the group’s share value in 2021, Morgan acquired a most annual bonus of £683,000, in contrast with zero in 2020. Chief monetary officer Steve Crummett additionally zoomed up the checklist to 3rd, from ninth final yr, as his complete remuneration was £2.2m – making him comfortably the trade’s highest paid CFO. Crummett’s bonus was £545,000, whereas the worth of his long-term incentives almost tripled to £1.16m.

Shareholder revolt

However whereas the pair oversaw a greater than doubling of Morgan Sindall’s annual pre-tax income in 2021, some had been left unimpressed by the pay and bonus will increase. In Could round a 3rd of the agency’s shareholders voted in opposition to the executives’ remuneration packages. Morgan Sindall mentioned on the time the packages acknowledged the “distinctive circumstances created by the pandemic and be certain that executives stay adequately incentivised”.

Additional proof of the general bounceback in govt pay got here at Galliford Strive, the place chief govt Invoice Hocking noticed his total remuneration greater than triple to £1.03m. This was partly helped by his primary wage and costs being restored to £450,000 after he took a 25 per cent minimize for 3 months in 2020 as a result of pandemic.

A notable growth was Costain’s Alex Vaughan making the checklist for the primary time, having joined the group in Could 2019. The contractor nonetheless reported a pre-tax loss in 2021, however this narrowed to £13.3m, in contrast with £96m the yr earlier than. Like lots of his friends, Vaughan’s remuneration was boosted by the return of a hefty bonus. He acquired £474,683 in “annual incentive”, in opposition to nothing the yr earlier than.

First girl on the checklist

Costain was additionally chargeable for a landmark inserting on the checklist. Helen Willis, the agency’s chief monetary officer, is the primary girl to seem within the high 20 since CN’s survey began in 2018. Willis landed at fifteenth after being awarded an total package deal of £802,055 in 2021, helped by a bonus of £394,200.

Nevertheless, with 19 out of 20 of the checklist being males, like the broader building sector, boardrooms nonetheless have an extended method to go in enhancing their report on variety.

On wider societal points, whereas govt pay bounced again final yr, this was earlier than the price of dwelling disaster correctly kicked in. It’s possible that companies will likely be weighing up how they reward their executives in contrast with the remainder of the workforce.

Various corporations have already responded by awarding additional funds to employees. Galliford Strive introduced in September it was giving as much as £750 to round 1,800 staff, representing about half of its workforce. John Sisk & Son is handing an additional £900 to its UK employees and €1,000 in Eire and Europe. In the meantime demolition specialist Keltbray is giving £1,000 every to employees incomes beneath a primary wage of £50,000.

Speke says these figures need to be put in context of how a lot employees on the high are incomes. “Clearly it’s a useful amount of cash however whenever you have a look at inflation and the way that hits these on decrease incomes more durable I feel we have to be cautious in celebrating it an excessive amount of. When you have pay improve according to inflation then that’s respectable, however how does that examine to these on the high?”

Attracting the calibre

Pay ratios stay an space of focus as giant UK listed corporations with greater than 250 staff are required by regulation to report them. At Balfour Beatty, the median pay ratio between boss Leo Quinn and its UK employees was 57:1, up from 45:1 in 2020, however down on 2019’s 65:1. At Kier, its nearest rival by way of dimension, the pay ratio between chief govt Andrew Davies and UK employees was 36:1, up from 20:1 in 2020. Kier says this was as a result of bonus paid to Davies. Its annual report provides: “It considers that the median pay ratio for 2021 … is in line with the pay, reward and the development alternatives out there to UK-based staff throughout the enterprise.”

Looking forward to govt pay rewards within the present yr, Stephen Rawlinson, an anaylist at
funding and administration consultancy Utilized Worth believes it might be a unique story based mostly on the share value efficiency of quite a few main companies. “Many of the share costs did moderately properly final yr, nevertheless it gained’t be the identical this yr,” he says. Within the yr so far, Kier, Morgan Sindall, Galliford Try to Costain have all seen theirs fall. Solely Balfour Beatty has seen its rise.

Nonetheless, remuneration committees nonetheless have to be seen to be paying aggressive charges to lure the most effective expertise. “If you wish to entice folks of the calibre of John Morgan, Andrew Davis and Leo Quinn, then you definately’ve received to pay them the going fee for the job now,” says Rawlinson. “They face unprecedented challenges. Though the query you consistently come again to is: do they deserve all of this cash?”

And with the present political and financial unrest, remuneration committees must suppose lengthy and exhausting about any bonus funds for the present yr and the way they are going to look to the workforce.

“We’re dealing with an unprecedented price of dwelling disaster and corporations are depending on the entire of the workforce delivering,” says Speke. “If corporations are doing properly bosses may be paid extra, however that also needs to be mirrored in inflation-busting pay rises for employees.”

Development’s high 20 greatest paid executives (figures based mostly on corporations’ most up-to-date annual reviews, revealed previous to 21 September 2022)
2022 rank 2021 rank Change Firm Govt Function Fundamental wage  (£) Complete package deal 2022 (£) Complete package deal improve
1 1 0 Balfour Beatty Leo Quinn CEO 800,000 2,942,943 688,137
2 5 3 Morgan Sindall John Morgan CEO 547,000 2,765,647 1,670,738
3 9 6 Morgan Sindall Steve Crummett CFO 436,000 2,210,000 1,332,000
4 2 -2 Keller Michael Speakman CEO 571,000 1,691,000 256,000
5 4 -1 Balfour Beatty Philip Harrison CFO 441,500 1,527,611 411,284
6 15 9 Kier Andrew Davies CEO 595,000 1,323,000 710,000
7                         NEW Kier Simon Kesterton CFO 482,000 1,138,000 725,000
8                         NEW Galliford Strive Invoice Hocking CEO 450,000 1,027,000 701,000
9 7 -2 TClarke Mark Lawrence CEO 418,500 1,016,420 94,905
10 6 -4 Renew Paul Scott CEO 314,000 1,010,000 177,000
11 11 0 Henry Boot Tim Roberts CEO 478,000 983,000 268,000
12                         NEW Costain Alex Vaughan CEO 431,375 980,793 533,083
13                         NEW Keller David Burke CFO 375,000 927,000 715,000
14 12 -2 TClarke Mike Crowder Group managing director 357,000 875,358 80,310
15                         NEW Costain Helen Willis CFO 360,000 802,055 760,643
16 19 3 Watkin Jones Richard Simpson CEO 382,500 784,735 247,691
17                         NEW Renew Sean Wyndham-Quin CFO 240,000 772,000 298,000
18 14 -4 Galliford Strive Andrew Duxbury FD 367,000 760,000 120,000
19 18 -1 TClarke Trevor Mitchell Group finance director 311,375 757,292 70,457
20 17 -3 Renew Andries Liebenberg Govt director 225,000 745,000 136,000
KELLER: David Burke’s earlier figures replicate half yr (from October 2020).  COSTAIN: Helen Willis’s earlier figures replicate half yr (from November 2020). NB: Our high 20 doesn’t embrace executives at housebuilders.