Insurer reckons general insurance has improved in value, but payout due top brass needs elucidating given falling profits
A group of car insurance executives enjoying a £40m jackpot, earned over only three years, ceased to be exceptional years ago. Peter Wood set a higher benchmark a couple of decades ago when he founded Direct Line and then flogged it to RBSfor a princely sum. Ever since, the car insurance industry has operated on the assumption that its executives require the lure of an enormous financial carrot to get out of bed.
LV=, as Liverpool Victoria Friendly Society calls itself these days, was only reflecting that thinking in 2013 when it agreed an arrangement with the top brass of its general insurance division. The executives, led by boss John O’Roarke, put in £4.5m between them to buy a minority stake. Those shares would then be bought back after three years at a price determined by the increase in the value of the business they run.
Continue reading...from Business blog | The Guardian http://www.theguardian.com/business/nils-pratley-on-finance/2016/mar/15/lv-40m-bonuses-that-dont-add-up-insurer
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