Mark Hartigan, the former chief executive of LV who led the UK life insurer during a failed attempt to sell to Bain Capital, has been awarded another £318,000 bonus for 2022 that critics of the deal branded the “final insult” from his tenure.
Hartigan, who resigned from LV last year in the fallout from the thwarted deal, was graded as a “good leaver” and so eligible for a prorated bonus, according to the mutually owned life insurer’s annual report, published on Thursday.
The group highlighted his performance in the “development of a plan for LV continuing as an independent business and stabilising the business and management team following members’ rejection of the Bain Capital transaction”.
Two years ago, LV, which is owned by its customers, was embroiled in a highly publicised battle for the future of its mutual status.
A deal struck with Bain, the US private equity group, was rejected by members in late 2021 after they questioned the loss of mutuality, as well as the payouts on offer in the transaction.
Hartigan’s £511,000 bonus for 2021 was heavily criticised by opponents of the attempted sale, given his prominent role in the transaction. In recent months, LV has faced calls not to pay him a bonus in respect of 2022.
“After wasting over £30mn of members money on the failed demutualisation, this is really the final insult from Mr Hartigan’s tenure,” said Peter Hunt, managing partner at Mutuo, a campaign group for mutuals.
He said it was galling to members who were offered a “paltry” sum to hand the business over to the private equity group.
Gareth Thomas, a Labour MP and a vocal critic of the deal, said the plan to demutualise and sell to Bain was a “complete waste of money” and Hartigan “certainly does not deserve another pay-off”.
The episode did, he added, “at least expose the need to stop incentives for demutualisation and help mutuals access capital to expand”. Thomas called on ministers to sort this problem “urgently to help the likes of John Lewis”. The future of the retail partnership’s mutual status has been called into question after prospective plans to sell a minority stake.
Hartigan declined to comment.
In a statement on his bonus, LV said it had “fulfilled its legal and contractual commitments” and all decisions were made “following agreed and stringent processes and with the support of legal and remuneration advisers”.
The insurer’s full-year results, published on Thursday, showed operating profit flat at £31mn despite what it called “difficult economic conditions” that weighed on appetite for some investment products.
Sales of annuities, however, jumped 91 per cent year on year. Rising interest rates have made yields on these products more attractive.
