The departing £1.4 million-a-year finance director of Mitie, the troubled office cleaning group, is following her boss, Baroness McGregor-Smith, out of the building with a payoff worth at least £400,000.
The payout to Suzanne Baxter of £338,457 plus another £70,000 to help cover her legal costs and payments to recruitment agents, comes despite the indication that Ms Baxter had requested her own departure from the company.
Ruby McGregor-Smith, the chief executive of Mitie, who was ennobled two years ago by David Cameron, left the company under a cloud at the end of last year as profits and the share price plummeted amid questions about the group’s accounting and as the full extent of a disastrous move into social homecare unravelled.
Lady McGregor-Smith left Mitie with a payoff of at least £500,000 despite an expected halving of profits in the current financial year and a share price that at one stage had slumped by 50 per cent.
It was announced in January that Ms Baxter, 49, who is also a non-executive director of WH Smith, would be leaving Mitie. The departure was linked closely to the exit of her former boss, with whom she had worked as finance director since 2006, and to the decision of Phil Bentley, the new chief executive, to launch an internal review of Mitie’s accounting.
At that announcement it was said that “over 12 months ago the board commenced a detailed review of its succession plans and Suzanne Baxter requested that the role of group finance director be considered as a part of that process”.
Yesterday the company said Ms Baxter would remain “available” to Mitie until May, at which point she would be receiving her payoff. The timing of that May departure is crucial because it allows her to participate in the vesting of free shares under an executive long-term incentive plan as well as bonuses.
Theoretically, those LTIPs could be worth nearly £1 million. Company sources last night indicated that the financial performance of the company was such that Ms Baxter may be lucky to receive any LTIPs shares or a bonus.
Ms Baxter had been enjoying a good run with a company in which most of the group’s 60,000 workers are on the minimum wage. Last year her basic salary of £360,000 was augmented by a £338,000 bonus, free LTIP shares worth £594,000, perks including a car allowance of £23,500 and pension payments of £104,000 — more than six times the average annual salary of Mitie workers.
Lady McGregor-Smith got a minimum payoff of £445,355 when she left. In her last full year in charge she was paid more than £2.5 million including a £1.1 million LTIP bonanza and pension top-ups from the company of £152,000.
Ms Baxter is being replaced by Sandip Mahajan, former finance director at Balfour Beatty.