Grahame Chilton attended court yesterday afternoon speaking about Ardonagh’s pursuit of members of the Gallagher team
Former Gallagher UK boss Grahame Chilton took to the witness stand yesterday in the global broker’s ongoing court battle with Ardonagh over alleged staff poaching.
Chilton answered questions from Ardonagh QC David Craig about his correspondence with managing partner of the Alesco casualty division Tom Payne. Payne had had been approached by Ardonagh chief executive and former Gallagher International boss David Ross. The court heard Payne told Chilton that Ross was “making a big push and targeting Alesco” with substantial offers.
Chilton relayed to the court Payne’s message in an alleged August 2017 phone call to him that Ross wanted to “drive a juggernaut” at Alesco.
“Those are the words that David Ross said to Tom Payne, which he passed onto me,” he said.
“I was immediately drawn to the conclusion of looking at the Nice-type terrorist attacks and what we had seen in London, that he wanted to aim his lorry at Gallaghers as hard as he could.”
The court heard Chilton arranged remuneration changes being arranged for Payne’s casualty team, with one reason given that Ardonagh-owned Bishopsgate was making “life-changing financial offers”.
This included 20% salary hikes, sign-on bonuses and annual bonuses. Equity offers had also been referred to.
Payments
Chilton told the court that the language Payne had used in the phone call had concerned him that there would be no “reasonableness” what Ardonagh offered employees to tempt them away.
He added: “When I came into the business I found it was losing significant amounts of money because some ill-judged judgements had been taken in terms of hiring people on packages that were not sustainable.”
He said he believed former Gallagher International boss Ross could offer “silly money” that was not “reasonable business-like judgement” to attract members of the Alesco team.
He added: “To a certain extent I felt we were dealing with a competitor, after saying that he was driving a juggernaut at our business, where we were going to have to lock down people because the offers that they would receive could be out of the market in terms of money.”
Chilton told the court that retention payments made economic sense under the circumstances to ensure its top producers stayed with the business.
Revenue
Further correspondence read to the court by Craig revealed Chilton in 2017 to believe that Bishopsgate and the whole Ardonagh Group was under pressure to generate revenue growth around that time.
Chilton told the court that Ross “generally went about his business” by adding revenue “from wherever he could”.
Craig showed Chilton a document showing the recruitment into Bishopsgate and fellow Ardongh-owned Price Forbes between 2017 and 2018 by competitor. It revealed the majority of hires came from Ed Broking, with 21, followed by Miller, at eight. Only five members of staff joined from Alesco in the timeframe.
Craig said this demonstrated the significance to Ross and Ardonagh of generating revenue from as many sources as possible.
And Craig added that whether Chilton thought the offers made to Alesco staff were “silly money” or not, that this was just “the competitive market in action”.
Chilton responded that it “depends if it is economic to do that”.
He added: “If someone is offering considerably more than the value of that book of business, then it is not market. There are other reasons for it which you can’t explain.”
The trial continues.
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