RSA's Lee and Brown get pay rises for 2013

RSA chief executive Simon Lee and UK and western Europe head Adrian Brown have received basic pay rises for 2013 of 3% and 2% respectively for 2013.

The rises, which took effect on Monday, have boosted Lee’s basic pay to £824,000 (2012: £800,000) and Brown’s to £484,500 (£475,000), according to RSA’s 2012 annual report.

The basic salary increases for 2013 follow rises in total pay for both men in 2012.

Lee’s total 2012 remuneration, including cash bonuses but excluding share-based payments, increased 32% to £1.5m (2011: £1.1m).

Brown’s total 2012 remuneration was up 4% to £871,000 (2011: £837,778).

Bonus dip

The increases came despite falls in cash bonuses as a percentage of basic salary.

Lee’s 2012 cash bonus of £481,440 was 60% of base salary, while his 2011 bonus was 91% of base salary.

Brown’s 2012 cash bonus of £247,000 was 52% of his base salary, while his 2011 bonus was 88% of his base salary that year.

RSA’s executive directors can expect cash bonuses of 60% of their salary for ‘on-target’ performance and 120% of their salary for ‘outstanding’ performance.

Lee’s cash bonus reflected the financial performance of the group, which reported “good growth and financial performance despite a tough trading environment”.

Brown’s cash bonus is more weighted towards the performance of the UK and western Europe division he runs, although it does also reflect group performance.

RSA said the UK and western Europe division “made good progress in the year, targeting profitable growth and taking action to remediate key portfolios, but sustained significant losses higher than forecast, reflecting weather and other exceptional events.”

Dividend cut

News reports suggest the executives’ 2012 pay rises will anger shareholders as they follow a sharp dividend cut in 2012.

The insurer cut its returns to investors by 33% in February on the basis that the payout was unsustainable.

RSA said executive directors’ bonuses are determined by net written premium and combined operating ratio targets, as well as operational directives personal to their roles.