McFarlane, who took up his post at the start of this month, said that he will hang on to the shares for as long as he is chairman or a director of the firm.
FirstGroup said: “John will receive an annual fee of £250,000 in respect of his role as chairman and has elected to receive all of that fee in FirstGroup shares, underlining his confidence in the long-term prospects of the company and aligning himself closely with the interests of shareholders.”
McFarlane was named as FirstGroup’s chairman last month following a six-month search.
He was drafted in as chairman at Aviva in 2012 and has since overseen a restructuring of the insurance giant’s management team. Born in Dumfries, he spent ten years as chief executive of Australia & New Zealand Banking Group.
McFarlane took over from Aberdeen Asset Management chief executive Martin Gilbert, who had served as FirstGroup’s chairman since 1995 and who spent 27 years in total with the firm and its predecessor.
Gilbert announced his resignation in May as the FTSE 250 firm unveiled a heavily-discounted £615 million rights issue to pay off some of its £2 billion debt and salvage its credit rating.
Last month, Sandell Asset Management urged FirstGroup’s board to spin off its operations in the United States and sell its Greyhound division.
Sandell, which holds a stake of about 3.1 per cent in FirstGroup, said that its proposals would leave the remaining rump of the company free to concentrate on the UK bus and rail industries.