National Express chief is bullish about future prospects, as board acts to keep him on board

National Express Group chief executive Dean Finch has been handed an enhanced bonus and pension package after receiving approaches from several businesses. NEG said the award was designed to secure his leadership as the group prepares to embark on a growth strategy, and recognised Finch’s “significant contribution to the group’s growth and continued development”.

Finch is already the highest paid chief executive of the UK’s passenger transport plc groups. In 2011, he earned £1.45m, including a £687,000 bonus that represented 125% of his salary. This year, he will have the opportunity to earn a bonus worth 150% of his salary, but the board believe it is a price worth paying to hold on to him.

“When he joined the business [in 2010] it was in loss. Within two years we had posted record profits. That was noticed in the market, others were getting in touch with him and he had a number of opportunities. That is why the board moved,” an NEG spokesman told Passenger Transport.

Industry sources said Finch was likely to have been contacted by businesses outside the transport industry. He has also been linked with a return to FirstGroup, where the US school bus and UK bus businesses have performed poorly under new chief executive Tim O’Toole. During his decade at First, Finch had fulfilled various main board roles and was regarded as chief executive Sir Moir Lockhead’s heir apparent, prior to moving to Tube Lines as chief executive in 2009. However, First has denied the rumours and labelled them “untrue and entirely without foundation”. “There is no question of Finch joining FirstGroup in any role,” added a spokesman.

However, it was apparent during the presentation of NEG’s latest half year results that Finch regards NEG as being in a premier position to compete against larger transport businesses as European markets open to competition. With NEG’s recovery programme complete, he said the group was now able to use its unique geographical and operational spread to focus on expansion in a range of markets from US transit to European coach and rail to North African bus. In the medium term, there are aspirations to explore moves into Latin America.

“We have established a strong pipeline of opportunities across our businesses. That’s a change from where we were a year ago and we have set ourselves an ambitious agenda,” Finch said.

Bullishly comparing the qualities of his management team to rival operators, he considered that: “The key thing that differentiates National Express from other businesses is it has highly experienced and competent leaders in each of its divisions and each of those leaders is very hungry.”

Finch’s confidence in NEG’s position was also evident in a style that showed he will defer to none of his rivals’ past achievements, even finding time to refer light heartedly to Stagecoach chief executive Sir Brian Souter. “A few weeks ago Brian Souter said this [NEG’s Spanish coaching business] is a world class asset and for once Brian’s got it right. Thank you Brian.”

In addition to the increased bonus, Finch’s new incentive package means he will receive 261,000 NEG shares in 2017 if the company outperforms its rivals, and an enhanced pension if he stays with the group.

The award was announced shortly after  a 10% drop in half-year operating profits to £105.5m, which Finch said he “hated”. The fall in profits was caused by loss of the East Anglia rail franchise, following fallout from predecessor Richard Bowker’s over-ambitious East Coast deal, and from withdrawal of Department for Transport funding for concessionary coach fares. However, damage was minimised largely by £18m of cost savings across the group, as well as increased profits in the US school bus and UK bus division.

Finch joined NEG from Tube Lines in 2010 at a time when the company had been destabilised by the failure of the East Coast franchise and debt accumulated through international acquisitions. NEG’s major shareholders were in open rebellion and performance at a number of businesses was in disarray.

 

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