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Gov seeks help drawing up pay and bonus policies after Andium row

Gov seeks help drawing up pay and bonus policies after Andium row

Wednesday 08 September 2021

Gov seeks help drawing up pay and bonus policies after Andium row

Wednesday 08 September 2021

The Government is calling in consultants to help it draw up a new remuneration policy for its arms-length organisations nearly two years after it emerged that bonuses and pay rises totalling over £100,000 had been wrongly paid to two Andium executives.

A tender has been launched asking for management and business professionals to assist with the “formulation of a remuneration policy applicable to the States of Jersey shareholder governance oversight arrangements.”

The contract is due to start on 25 October, concluding on 31 January 2022.

A Government spokesperson confirmed to Express that the tender was a direct response to criticism levelled at it by the Comptroller and Auditor General (C&AG) two years prior in relation to the management of executive and non-executive board member pay.

The Chief Executive – Charlie Parker at the time – assumed responsibility for overseeing the policy's development, which was supposed to be completed by the second quarter of 2020 and implemented by September 2021.

However, work on the policy is yet to begin, with the tender process for external help only having opened on 20 August.

The row between the Government and the island's key social housing provider, Andium, kicked off in autumn 2019 when a resignation letter penned by its former Finance Director and Chief Operating Officer, John Hamon, was leaked to the media - just days before a deeply critical report on pay and bonuses at the social housing provider was published by the CA&G.

The report set out a detailed case study of how the increasing remuneration of Andium's CEO Ian Gallichan, and Mr Hamon, was handled by the board.

Their pay packets went up very significantly in fewer than five years, apparently without the explicit prior approval of the Government as sole shareholder, which was the agreed procedure.

Ms McConnell carefully laid out the series of deep disputes between Andium and the Treasury over the last four years, culminating in the Treasury demanding what they saw as excessive and unauthorised pay increases to be paid back, and bonuses to be refunded.

The row over the bonuses and pay rises led the current Chief Minister and former one, Frank Walker, who was then the Chair of Andium, to trade blows over what was to blame for what Senator John Le Fondré described as “excessive” salary levels.

In the end, Frank Walker stepped down from the board, alongside Vice-Chair Heather Bestwick, and former competition watchdog Mark Boleat was brought in as Interim Chair. In January 2021, Richard McCarthy CBE was appointed Chair.

The C&AG made two key recommendations to ensure such a situation does not arise again:

  • that the Government “assign responsibility for the development and oversight of a policy for Board remuneration covering companies, statutory bodies and funded bodies”
  • and “develop an overarching policy for remuneration of Boards of companies, statutory bodies and funded bodies detailing principles to take into account in determining: the level of remuneration; and the composition of remuneration, including the nature of reward schemes.”

Other arms-length organisations include: States of Jersey Development Company, Jersey Post, JT Group, Ports of Jersey and Jersey Overseas Aid.

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