SIG chief rewarded with £1m golden goodbye

The company’s annual report said Chris Davies received salary and fees of £549,000, benefits of £19,000, pension contributions of £160,000 and an annual performance bonus of £296,000. In addition, the remuneration committee granted him £549,000 under its long-term incentive plan, which is dependent on future share price performance.

Mr Davies, 59, stood down at the end of February after leading SIG through the financial crisis and subsequent recessions. He served as chief executive for five years and was with the group for 19 years. SIG will pay his salary, benefits and pension contributions until March 2014.

Leslie Van De Walle, group chairman, said: “On behalf of the board I would like to thank Chris for his major contribution to the group and the strong leadership he has shown as CEO, steering SIG through the most challenging trading period in its history, driving through substantial operational and commercial efficiencies and refocusing the group on its core activities.”

SIG paid finance director Doug Robertson total remuneration of £545,000 and granted him £315,000 under the long-term incentive plan.

Directors’ total pay totalled £1.81m last year, sharply down from £3.16m in 2011, as the group battled stagnant or sliding construction markets across the UK and Europe.

Mr Van De Walle said: “Against the background of a challenging macroeconomic environment and declining construction markets, the group delivered a resilient performance in 2012.”

Underlying pre-tax profits increased four per cent on a constant currency basis, but dipped 0.5 per cent to £84.1m once the weak euro was factored in. The weak euro also meant revenues fell 3.9 per cent to £2.6bn.

Gross margin rose to 26.1 per cent from 25.7 per cent. Underlying operating margin edged up to 3.7 per cent from 3.6 per cent.

SIG hiked its final dividend by a third to 3p per share.

As well as weak construction markets, the company said its performance in 2012 was hit by the second wettest year on record in the UK

Sales in the UK fell 1.4 per cent to £1.1bn, and including Ireland were down 2.4 per cent. Mainland Europe sales were up 1.8 per cent at £1.44bn at constant currency.

Mr Van De Walle said: “The group expects construction markets to remain challenging in 2013 and is therefore focused on making further progress through market outperformance, enhancing gross margin and continuing to keep a tight control on its underlying cost base.”

Stuart Mitchell, who joined from hardware retailer Wilkinson, took over as chief executive in March.

Speaking last month, he said: “There are a number of self-help things which Chris and the previous team have put in place but I will be building on that.

“There is further potential in the group, with opportunities to improve performance in areas such as procurement, e-commerce, supply chain, logistics and rebranding.”

The group is planning to grow in its three core markets of insulation and energy management, exteriors and interiors by combining its local brands with the economies of scale and “know how of a multinational group”.

Shareholders rejected SIG’s remuneration report in 2010, after disapproval from influential investor body the Association of British Insurers.

SIG holds its annual general meeting next month.