Former Cobham boss Bob Murphy’s £1m payoff reflects “unsatisfactory performance”
The former head of Cobham will be given a golden goodbye of nearly £1m after quitting the firm last year in the wake of a raft of profit warnings.
Bob Murphy, who officially left the defence contracting giant in January, is expected to be paid £775,000 in 2017 as part of a contractual payoff, alongside a £200,000 relocation package he has already received to move back to the US.
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Murphy's pay rose from £1.4m to £1.5m in 2016 according to the group's annual report, although the increase in his pay last year includes the relocation settlement. The firm has bounced from pillar to post in recent times, leading to Cobham's share price falling by more than 42 per cent in 2016.
Shares dived further in February after it announced its fifth profit warning in less than two years.
The FTSE 250 firm said neither Murphy nor outgoing finance director Simon Nicholls will receive compensation under long term incentive plans. Cobham's remuneration committee said Murphy's pay reflected Cobham's "unsatisfactory performance" in 2016.
Remuneration chair Alison Wood also revealed Cobham had shelved plans for a "fundamental review" of executive pay, previously slated to be put to shareholders at its AGM in April. Instead, such plans will be undertaken over the course of 2017 and put to shareholders in 2018.
Wood wrote in the annual report:
Due to the timing of the announced changes to the senior members of our executive team, the committee is not proposing a significant overhaul of our remuneration policy.
Read more: Cobham shares in a flat spin after revealing 2016 flop
Murphy's replacement, David Lockwood, will receive base pay of £690,000, 11 per cent lower than his predecessor. This could rise considerably based on performance, with contractual long term incentives allowed of up to 200 per cent his base salary.
Lockwood's appointment was announced in August and meant he forfeited his 2016 incentives from his previous employer, electronics firm Laird.
He was forced to call off a family holiday in order to attend an induction event at his new employer, a move that led to his spouse charging Cobham £9,000 in travel expenses to accompany him while he orientated himself with the firm.