The largest transport operator in the UK and North America, FirstGroup said it will pay its former chief executive, Tim O’Toole a severance package of £699,167.
FirstGroup announced earlier this week that Tim O’Toole will be stepping down as Chief Executive and from the Board.
The company did announce that Wolfhart Hauser will be taking on the interim role of Executive Chairman and Matthew Gregory taking on the interim role of Chief Operating Officer in addition to his full-time role as Chief Financial Officer.
FirstGroup said in a statement that “In order to assist with a period of transition, Tim has agreed to be placed on garden leave until his employment with the Company ends on 30 September 2018. He will continue to receive his current salary, benefits and pension until 30 September 2018. A maximum payment of £699,167 in lieu of Tim’s salary, pension, car allowance and medical insurance for the unexpired period of his notice will then be made in eight equal monthly instalments beginning with the Company’s October payroll. The instalments will be subject to mitigation”.
“The Company will reimburse Tim, up to a maximum of £9,000 per year, for expenses relating to taxation advice for years 2017/18 and 2018/19. He will also receive a capped contribution towards reasonable legal fees incurred in connection with his departure.”
However, FirstGroup said it will be terminating Tim’s share awards “Tim’s awards under the FirstGroup Long-Term Incentive Plan will lapse on the termination of his employment with the Company. No further Long-Term Incentive Plan awards will be made.”
“The Remuneration Committee having considered the matter carefully has determined that Tim’s deferred bonuses under the FirstGroup plc Executive Annual Bonus Plan, which were awarded in 2016 and 2017 and reflect past performance, will vest on their normal vesting dates. The vesting of the 2017 award in 2020 will remain conditional upon a determination of the Committee following the conclusion of appropriate investigations into the 2016 Croydon tram incident.”
“If it is determined that any shares should vest, a full explanation will be provided in the Directors’ remuneration report. Tim will not receive a bonus in respect of 2018 and will not be eligible for participation in any 2019 bonus scheme.”