AA finance chief rejects bumper bonus after year of breakdowns

The finance chief beleaguered breakdown giant AA has turned down a bonus worth hundreds of thousands of pounds.

Despite hitting annual profit targets, AA chief financial officer Martin Clarke requested not to be considered for top-ups to his £560,000 pay. He received short-term incentives of £346,000 in the prior year, according to the AA's annual report, which was released today.

AA, which once billed itself as "Britain's fourth emergency service", has endured its worst year since floating in June 2014. Between July 2017 and March 2018, the firm's shares shed more than 70 per cent of their value.

The initial catalyst of the sell-off was the bizarre sacking of exec chairman Bob Mackenzie amid reports of a fight with the firm's insurance chief during an away day at the luxurious Pennyhill Park hotel in Surrey – the usual training venue for England's rugby team during the Six Nations Championship.

Read more: The AA has broken down. Can its new boss get the company back on track?

Lumbered with a near-£3bn debt pile concerns were raised about AA chief executive Simon Breakwell's planned overhaul of operations. Shares, however, have surged, doubling since the firm's March nadir as investors rallied in support of a pivot towards insurance and plans to "innovate" its roadside operations.

Despite his number two forgoing a bumper payday remuneration policies entitle him to, Breakwell took home pay of £765,000 for the year to January 2018 – which included a bonus of £311,000 for hitting a range of financial and non-financial targets. Breakwell was appointed CEO on 1 August 2017, initially on an interim basis. His bonus was reduced by 10 per cent by the AA's remuneration committee.

"This has been a challenging year for the AA and of course this is reflected in our bonus out-turns." AA remuneration committee chair Suzi Williams wrote in the annual report.

Breakwell

Breakwell's base salary is £700,000, some £50,000 less than Mackenzie was previously taking home. He is in line for a bonus of more than £1m for the year to January 2019.

Representatives for the AA declined to comment on the precise metrics Breakwell must hit to be entitled to such a bonus. The annual report outlined his bonus would be largely determined by the firm hitting earnings' targets as well as "strategic individual objectives".

"The precise performance targets for the coming year are considered to be commercially sensitive at present and the Committee provide expanded disclosure of targets on a retrospective basis. The 2019 bonus will again be subject to both malus and clawback," it was stated in the annual report.

Read more: The AA spat with ex-boss Bob Mackenzie has just got a whole lot nastier

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