We’re not one for tub-thumping about executive pay, or indeed remuneration in the financial sector generally, but it’s worth pointing out the contrast in fortunes as Direct Line embarks on an ambitious £3bn flotation.
Paul Geddes, Direct Line’s chief executive, and a number of other senior executives are set for a windfall when the insurer spins off from Royal Bank of Scotland later this year. It could be worth up to £3m, according to the Sunday Times, and other senior executives are being offered seven-figure “golden handcuffs”.
By contrast, redundancies are hitting the rank-and-file; 891 job losses were announced earlier this month and Geddes confirmed that more would come after the IPO as the firm looks to strip out £100m in costs by 2014.
Direct Line employs 15,100 staff, and a large proportion of these work in call centres in nearshore locations, but the average salary is still a stark difference to those in the senior ranks – based on the £160m accrued for staff costs in the first half of 2012, average pay per head is just £21.2k.
In fairness, Geddes and chairman Mike Biggs – as well as personal lines head Tom Woolgrove and claims leader Steve Maddock – are credited with turning an ailing business around so it makes sense to try and retain them.
However, in an era when financial sector workers are being vilified for excessive pay, it’s worth pointing out that the salary above is below the UK national average of £26.2k.
We’ve mentioned previously that it’s a tough time to lose your job in customer service or claims in insurance currently, with more firms cutting than building in this area. Direct Line is no exception; while it continues to recruit in the UK – with around 160 jobs currently – there are no vacancies in customer relations, customer services or claims.
So, where is it recruiting? The largest proportion of positions (21) is for its marketing and communications department, which is not surprising for an organisation with slick television advertising and an aversion to pay comparison sites. Then there are a good number of HR roles (including a ‘talent and succession consultant) and a big focus on IT positions.
Within the business itself, actuarial positions are still in demand, particularly pricing and risk and capital modelling positions, as well as business change, risk, compliance and assurance.