Keith Cochrane reaps benefit of Weir’s profit growth with £1m bonus

THE board of Weir Group has been rewarded for a record year of growth with chief executive Keith Cochrane handed a near-£1 million bonus and double-digit pay rise.

Cochrane and his two fellow executive directors, Alan Mitchelson and Jon Stanton, shared a total bonus pot of £1.725m, up by 35 per cent on their combined payments last year.

The payouts came after a year when the Glasgow-based engineering group reaped the benefits of a booming mining sector and growth in emerging markets with sales up by 40 per cent to £2.3 billion and pre-tax profits rising by 42 per cent to £392m.

In total, boardroom pay and fees at the FTSE-100 company rose to £3.67m, up from £3.09m the previous year.

Cochrane received a £625,000 salary and £975,000 bonus as part of a £1.62m package, up from £1.26m the previous year. Last year the company’s remuneration committee said that, in light of the growth of Weir in recent years, it intended to increase the 47-year-old’s salary to £725,000 over a three-year period, although it stressed it would consult with organisations including the Association of British Insurers which represents major investors over planned rises.

The committee said “in light of the chief executive’s performance, which has continued to be of a high standard and is reflected by the group’s strong performance and enhanced FTSE position” it will increase Cochrane’s salary to £700,000 this year. Finance director Jon Stanton will receive a 5 per cent rise to £420,000 from next month. For last year Stanton received a £392,500 salary and £400,000 bonus as part of an £806,957 package, up from £732,573.

Legal and commercial director Alan Mitchelson, who is standing down at the forthcoming AGM, received a £344,127 salary and £350,000 bonus as part of a £708,584 package, up from £665,887.

The committee said that it had taken into account recent increases awarded to Weir group employees – of 2 per cent to 5 per cent – when determining executive pay.

The bonus figures for Cochrane and Stanton include sums of £292,500 and £120,000 respectively which will be deducted from their bonus in exchange for shares which they will receive in three years’ time provided they are still employed by the group. A clawback provision has also been introduced by the company which will enable it to recover all or part of bonuses awarded in the event of a material misstatement of the company’s financial results.

Chairman Lord Smith saw fees and benefits paid for his services during the year rise by 28 per cent to £233,614 from £182,980.

During the year the group’s global expansion continued with the opening of 19 service centres last year, including sites in Spain and Tanzania. New orders rose by 30 per cent to almost £2.5bn and shareholders were rewarded with a 22 per cent rise in the total dividend to 33p.

Despite a broker downgrade, shares closed up 66p, or 3.9 per cent, at 1,764p against a year high of 2,254p.