Financial Times chief executive John Ridding has agreed to return his six-figure pay rise after staff complained his £2.6m remuneration package last year made a “mockery of any concept of fairness”.
In an email to staff today, seen by Press Gazette, Ridding said he was aware his pay increase of £510,000 before tax “feels anomalous and has created concerns” among staff.
The increase was revealed in full-year accounts filed by FT Ltd last month, which also revealed the company’s revenues were up by more than £10m, but profit before tax was down from £6.6m to £4.7m.
The FT has said the Companies House accounts do not provide a full picture of its earnings and that global profits in fact doubled last year.
Members of the National Union of Journalists’ FT chapel committee wrote an email to editorial staff this month calling on Ridding to “give back his absurdly large pay increases” and “use the funds to reward all staff”.
They said his pay package was equivalent to 65 per cent of the FT Ltd’s £4m operating profit last year, as per accounts at Companies House, and 100 times the salary of a trainee journalist at the FT.
In his email to staff (published in full below), Ridding said he would reinvest the pay increase money back into the company.
He said the “first call” on it would be a women’s development fund “to augment and accelerate our efforts to support the advancement of women into more senior roles at the FT and reduce the gender pay gap”.
The move is in line with demands from staff, who called for it to be used to help bridge the FT’s gender pay gap, which is at 18.4 per cent (median) favouring men.
Ridding said his pay, structured by owners Nikkei, was performance related and that 2017 was a “particularly strong year” for the FT “in which we significantly beat our targets”.
He said subscriptions had increased by more than 65,000 to reach a record high of more than 910,000, towards a goal of one million paying readers worldwide, and that “profits doubled”.
“As ever in our disrupted sector, cost discipline was an important factor,” he said.
“But the main driver of our performance was growth in digital and content revenues, the result of our excellent journalism and highly effective commercial, technology and data teams, supported by investment from Nikkei.”
Her added: “While our performance has been strong, I recognise that the size of the consequent jump in my own total reward in 2017 feels anomalous and has created concerns. Many key decisions rest with me as chief executive, but collective hard work at the FT underpins our success.”
Ridding said he had asked Nikkei to restructure his pay to take into account his remuneration before the company took it over and that the owners had supported the idea and were seeking independent advice
Ridding was paid about £1.6m in 2015 and £2.04m in 2016.
Japanese media company Nikkei bought the FT from Pearson in 2015 in an £844m deal. Pearson had owned the title since 1957.
John Ridding’s email to staff in full:
My remuneration in 2017 has been a focus of discussion within the business. I have thought hard about this and consulted with colleagues, and want to address the matter directly with all of you.
My pay was established by Nikkei when they acquired the FT three years ago. It was independently assessed and benchmarked and its structure was highly performance-related, which is often the case at newly acquired businesses. Also, a retention element was included to ensure a smooth transition and the development of our partnership.
Since then, the FT has met its growth objectives and validated Nikkei’s substantial investment. Last year was a particularly strong year, in which we significantly beat our targets. Subscriptions increased by more than 65,000 to reach an all-time high of more than 910,000 and take us a big step towards our goal of one million worldwide paying readers. Profits doubled and our recent acquisitions made a valuable contribution. As ever in our disrupted sector, cost discipline was an important factor. But the main driver of our performance was growth in digital and content revenues, the result of our excellent journalism and highly effective commercial, technology and data teams, supported by investment from Nikkei.
I take pride in the FT’s performance and the position we have gained over the years as an industry leader in digital media. The work to secure our partnership with Nikkei has given the FT a strong and supportive owner, a stability that is rare in the media sector, and a commitment to editorial independence.
While our performance has been strong, I recognise that the size of the consequent jump in my own total reward in 2017 feels anomalous and has created concerns. Many key decisions rest with me as CEO, but collective hard work at the FT underpins our success.
Taking all of this into account, I have concluded that my scheme of remuneration should be restructured. Since we have now come through the immediate post-acquisition period, a new pay scheme should take into account my pay level before the acquisition, which was approximately £1.6m in 2015. Of course, my remuneration will continue to be determined by Nikkei. But they support this idea and will seek independent advice as they consider the options.
For now, I have decided to reinvest into the FT the increase awarded in 2017, which is £510,000 before tax. The first call on these resources will be a women’s development fund to augment and accelerate our efforts to support the advancement of women into more senior roles at the FT and reduce the gender pay gap. This is a strategic priority for the FT, as you know, and something I feel strongly about. The balance of funds will be used to help meet the company’s overall financial objectives.
Nikkei support these proposals and my approach. Like me, they want us to focus fully on our goal of quality growth and our mission of gold standard global independent journalism. Let’s all get on with the opportunity and our important mission.
Picture: Reuters/Benjamin Beavan