Home news AA demands ex-chairman repays £1.2m in bonuses

AA demands ex-chairman repays £1.2m in bonuses

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The AA is demanding that its ousted former chairman repays more than £1.2m in bonuses over an allegation that he was involved in a public altercation that was not previously disclosed to its board.

Sky News has learnt that lawyers for the UK’s biggest breakdown recovery service have written to Bob Mackenzie requesting that he hands back his annual bonuses for 2016 and 2017.

People close to the situation said that the AA’s letter to Mr Mackenzie, who was dismissed by the AA for “gross misconduct” in July, referred to an earlier bust-up in a public place which it argued provided grounds for clawing back the payments.
The individual said to have been involved in the earlier altercation is not thought to have been an AA employee.
Mr Mackenzie’s lawyers are expected to dispute the AA’s efforts to force him to repay the bonuses.

Image: Bob Mackenzie led a management buyout of the AA and its flotation in 2014. Pic: AA
The company’s annual report for this year discloses that Mr Mackenzie was paid an annual bonus in 2016 of about £700,000 and approximately £500,000 the following year.
His contract had entitled him to bonus payments in each year up to a maximum of £900,000.
Mr Mackenzie left the company during the summer after a row in the bar of a country hotel with Michael Lloyd, the head of its insurance arm, turned into a physical conflict.
It subsequently emerged that Mr Lloyd and other members of the AA’s board were keen to explore a merger of its insurance business with Hastings, a listed group – a move opposed by Mr Mackenzie.

The former AA chairman was hospitalised after the encounter with Mr Lloyd, and has been publicly described by his son as receiving treatment for mental health issues.
Mr Mackenzie was responsible for bringing the AA to the London stock market in 2014, but has since been wrestling with a heavily indebted balance sheet and no obvious means to grow profits sufficiently quickly to materially reduce its borrowings.
The dispute over his past bonuses is not the only contentious legal issue relating to Mr Mackenzie’s departure from the company.
He also participated in a potentially lucrative reward scheme which is due to pay out depending upon returns to shareholders during the five years after its flotation.
However, the weak performance of the AA’s shares have cast doubt over whether that scheme will pay out material sums.
On Tuesday, shares in the AA were trading at 160p, meaning they have fallen by more than a third over the last 12 months.
The company now has a market value of less than £1bn, a figure dwarfed by its debt pile.
Spokesmen for the AA and Mr Mackenzie declined to comment.

Source: SKY News Feed