DLG’s Geddes and Reizenstein took pay cut in 2012

Direct Line Group chief executive Paul Geddes (pictured) and chief financial officer John Reizenstein were paid less in 2012 than the previous year despite being awarded bonuses.

The two have also had their base salaries frozen for 2013, Direct Line’s 2012 annual report reveals.

Geddes’s total 2012 emoluments, which include basic pay, pension allowance and annual bonuses, were £1.66m, down 3.3% on 2011’s £1.72m.

Reizenstein was paid £894,000 in 2012, down 5% on the £937,000 he received in 2011.

Below target

Geddes was paid a performance-related bonus of £760,000 during the year and Reizenstein £345,000. But this was less than they would have got had their performance been in line with the targets set by Direct Line Group’s remuneration committee.

The committee felt that the overall bonus performance for 2012 was marginally below “on-target”.

The report said: “The committee acknowledged that the commitments set out at IPO have been met, and that the share price has increased significantly since listing. However, taking into account wider factors and internal stretch targets, overall performance was slightly below on-target.”

If the performance had been on target, Geddes would have received a £798,000 bonus and Reizenstein £414,000.

If performance is considered ‘superior’ by the committee, Geddes would get a bonus of £1.33m and Reizenstein would get £690,000.

Geddes’s base salary is £760,000 under his Direct Line Group contract, and Reizenstein’s is £460,000.

But the actual base salary the two men received in 2012 was different because the two migrated from their old RBS contracts to their new Direct Line Group ones in September. Under the Direct LineGroup contracts, some elements previously paid as benefits are included in base salary.