'£4.6m ... because Haste is worth it'

Eyes will roll at this week’s revelation that former RSA boss Andy Haste pocketed a hefty pay cheque of £4.6m in his last year at the insurer. The news will rankle all the more with the 120 individuals whose jobs were cut by RSA earlier this year.

But let’s not get carried away with tub-thumping. As Panmure Gordon analyst Barrie Cornes highlights in our story, the key question is “was he worth it”?

And in Haste’s case, the answer is a resounding ‘yes’.

He turned RSA from the basket case of UK GI into a solid all-round performer that came second only to Allianz in Insurance Times’s recent analysis of the top insurers’ financial performance over the past five years. In so doing, Haste delivered solid value to shareholders and, in keeping with market economics, was rewarded for it.

The problem with high pay, which business secretary Vince Cable has been highlighting, comes when it’s a reward for failure, as in the case of Barclays chief Bob Diamond. Diamond trousered £17.7m, some four times Haste’s pay cheque, for his performance in a year that he himself described as “disappointing”.

Given the context that insurance is competing with banking for the best human resources in financial services, RSA’s remuneration begins to look positively restrained. Indeed, insurance has all too often lost out in the battle for talent for the very reason that, compared to banking, salaries are low.

The same cannot be said of the broking sector, where a combination of luck, timing and old-fashioned salesmanship has made more than a few multimillionaires.

And, given the recent strained performance of the mega-brokers, payouts such as the $11.5m (£7.2m) handed over to Willis’s Joe Plumeri are far more of a concern than Andy Haste’s golden farewell.