In the current economic climate, companies have to be sensitive to the mood of the nation and their clients. These are tough times for many people around the country but some businesses are experiencing a boom. Given the terms of contracts that some firms provide or the desire to ensure that top professionals are not poached by rivals firms, some companies will be keen to provide their top level bosses with a sizable remuneration package, which will often include bonuses. It is understandable why some firms will act in this manner but equally, there shouldn’t be too much surprise if people in the general public complain.
This is why the news that Savills, regarded as a leading upmarket firm in the estate agency industry, has provided a 44% pay rise to their boss has taken up space in the media. Given the runaway success of the London property market at the moment, there is a strong argument that Jeremy Helsby, as the chief executive of the group, deserves an increase in his pay for the success of the firm. However, most people would have been delighted with a salary of £1.8m, which he received in 2012 and there has been some debate about whether he merited an increase which took his pay to £2.6m for 2013. Helsby has been with the firm since 1980 and his increase came in the shape of shares and his slice of the profit-sharing scheme run by the company. The basic salary that Helsby received remained constant at £225,000 which meant that he received more than £2.3m in additional perks and bonuses. It is easy to see why the London property market is booming if this is the level of bonuses that are on offer to people who operate at the top end of London industry.
Positive figures all round for Savills
These figures were contained in the company’s annual report and Savills were pleased to say that revenue had increased by 16%. This led to a rise in underlying profits of 26%, resulting in a figure of £55m. While the focus of the profit sharing scheme will fall on the main boss, it is important to bear in mind that every employee of the firm, the company has over 26,000 employees around the country, will gain a share of the profit pot. This amount stands at £169m, a notable rise from the £138m from the previous year. The average worker at Savills may not receive a massive amount of cash from the scheme but in the current climate, any bonus has to be seen as a positive thing.
The firm is very well placed in the prime and executive market in London and the average price for property sales for the firm is over £3m. This is the context that the bonuses have to be viewed in and if everyone in the firm receives some form of benefit from the success, there shouldn’t be too many complaints.