Press Report : Phoenix Four’s £20m pay packet

Jon Griffin, Birmingham Post, 7th July, 2009

Longbridge under MG Rover

Longbridge under MG Rover

John Towers and the other members of the Phoenix Four were paid an average of over £1 million a year each in salaries and pension benefits over their near five-year reign at the helm of Longbridge.

The detailed remuneration packages for Chairman Mr Towers, Vice-Chairman Peter Beale and Co-Directors Nick Stephenson and John Edwards were revealed today for the first time in a dossier on the collapse of MG Rover. The dossier, drawn up by public relations firm Media House International, discloses that the Phoenix Four earned average salaries and bonuses of £430,000 a year, with annual company pension contributions of £730,000 each on top.

PR advisers hired by the Phoenix Four to draw up the report say the salaries reflected the senior roles and responsibilities of the four Longbridge executives. A Phoenix Venture Holdings spokesman said today: “These packages were unexceptional in the industry and in companies of that size.”

The Directors firmly believe one vital fact – Prime Minister Tony Blair wanted to save MG Rover. It was then Chancellor Gordon Brown who pulled the plug acting on advice from his special adviser Shriti Vadera.” The Phoenix Four’s PR Advisers, Media House International

The report also made a series of allegations over the Government’s role in the demise of the car firm and accuses current Prime Minister Gordon Brown of being responsible for pulling the plug on Longbridge. It said: “The Directors firmly believe one vital fact – Prime Minister Tony Blair wanted to save MG Rover. It was then Chancellor Gordon Brown who pulled the plug acting on advice from his special adviser Shriti Vadera.

“Since then the Directors suffered a torrent of media abuse fuelled by the Number 10 spin machine and designed to distance the closure of MG Rover as far away as possible from the door of Brown and Vadera.”  The report said: “A major part of the smear campaign against the Phoenix Directors concerns the allegedly vast amounts of money they “plundered” from the company.

“The mythical figure of £40 million in payments to the Phoenix Directors is entirely inaccurate and based on erroneous and mischievous press briefings. Average annual salary and bonus for each of the four Phoenix Directors from MG Rover and other Phoenix companies was £430,000 per annum – well below the industry and FTSE 100 average.

“Total payments in salary and bonuses to the Phoenix Directors over five years totalled £8.5 million. By comparison, Ford Senior Directors were paid between £1 million and £3 million each per year while presiding over a record £13 billion loss. Pension contributions, not previously in place and payable on retirement, were £730,000 per Director per year, equating to an annual salary of £100,000 to £150,000 per year, well below industry and FTSE averages.”

The mythical figure of £40 million in payments to the Phoenix Directors is entirely inaccurate and based on erroneous and mischievous press briefings. Average annual salary and bonus for each of the four Phoenix Directors from MG Rover and other Phoenix companies was £430,000 per annum – well below the industry and FTSE 100 average.” The Phoenix Four’s PR Advisers, Media House International

The dossier was released just 24 hours after Business Secretary Lord Mandelson announced that a Serious Fraud Office investigation was to be launched into the collapse of MG Rover in April 2005 with the loss of more than 6,000 jobs.

Reports at the time of the closure of Longbridge claimed that a £120 million short-term Government loan to MG Rover was favoured by Tony Blair and then Industry Secretary of State Patricia Hewitt but was opposed and vetoed by Brown and Vadera.

The dossier alleges that the £120 million bridging loan offer was “suddenly and mysteriously” withdrawn whilst the Department of Trade and Industry had “briefed negatively” about MG Rover’s finances.

[Source: Birmingham Post]

Posted in: AROnline News, MG Rover
Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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  1. Ross Armstrong says:

    …and so the twists and turns will out. I do not find it surprising that a Brown et al advisory team actually blocked this since there had been a string of decisions and proposals issued by Tony Blair that were vetoed and blocked throughout the reign of his tenure, including various NHS proposals and, well, pretty much anything that had to do with opening up the public purse.

    Note that, for every decision that has been made in the past, Gordon Brown has always taken credit but that, whenever things went wrong, he was nowhere to be seen – this was also an observation that Clare Short once made.

    In this case, I can fully believe what I read here and, yes, despite the idiocracy of Kevin Howe, those wages seem about right for a company the size of MGR.

  2. Chris Chapman says:

    See this link:
    http://www.guardian.co.uk/business/2005/apr/10/politics.motoring

    Looks like the fundamental problem with the loan was it could only be for a 6 month period due to EC rules – no way SAIC could generate that back in the time?

    However, with potential pension fund liabilities of £400 million, I guess that to SAIC the opportunity of picking the whole lot up for a lot less post-receivership was too attractive. Shame they cocked it up by letting Nanjing outbid them and then wasting a lot more time/money as a result.

  3. Merlin Milner says:

    So why did the Government listen to Shriti (Green Shoots)Vadera, a merchant banker? Perhaps a car industry expert might have been more suitable…

  4. Sammo says:

    To the Phoenix Four,

    Comparing your salaries to Ford and other major players is not acceptable. You acquired MG Rover and paid yourselves handsomely over 5 years. I actually worked in Methods Build for new models and you wasted mega money on projects that were never going to be viable within the 5 years of your management.

    You have all got richer when the workforce ended up with nothing. Shame on you TOWERS and your 3 amigos. We trusted you all and you gave us nothing except our P45s. If you were Members of Parliament you would all be on the front page of the national papers. If you ever read these comments (or anyone else doing so has the ability to pass them on) then my message is simply this: pay back what you have taken and give the workforce what they are geniunely entitled to.

  5. Jon T Pierce says:

    The blame for the demise of Britain’s last car manufacturer lies with the British Government. Gordon Brown and Mandelson should hang their heads in shame – this would never, never have happened in France.

  6. Andy says:

    Just this time give the employees the money that’s been put aside for them: £5000+. 4 years is a long time to wait and, as we are all on a lot less money and some are still not working, it would be nice to breathe a little easier. Come on people, it’s time to pay the piper.

  7. didierz65 Didier Ziane says:

    Did I get that right? After £16M+ has been spent, more’s gonna get wasted on another investigation???

  8. James Godwin James Godwin says:

    Here is a well-balanced argument from Just-Auto.com

    GOLDING’S TAKE: The Phoenix Four forfeit
    http://www.just-auto.com/article.aspx?id=101105

    I must say the paypackets were huge? Let’s consider that in 2003 the CEO of JaguarLandRover was on about £500K…

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