The former chief executive of LV= has been awarded a £318,000 bonus despite widening losses and lingering controversy over his role in a failed sale to an US private equity firm that would have resulted in the demutualisation of the insurer.
LV= said in its annual report that Mark Hartigan, who stepped down at the end of September, less than a year after the botched sale, had been a “good leaver” under the terms of his contract, and was therefore eligible for a bonus for 2022.
The payout brought his total pay to £766,000 for 2022. That was down from £1m a year earlier when he worked the entire calendar year and received a much-criticised bonus worth £511,000.
The bonus for 2022 was granted despite LV= reporting a loss of £265m before tax and member payouts, after a volatile year in the markets hit its investment portfolio. This was more than four times the £66m loss record for the previous year.
Eligible members shared £35m worth of 2022 profits, down from £38m a year earlier. LV= said it was delighted to provide the shared profits to members “despite the economic and market turmoil”.
Hartigan’s exit followed anger from members and others over his attempt to orchestrate the insurer’s sale to the private equity firm Bain Capital in 2021.
At the time, he argued that LV= could not continue as an independent insurer after a strategic review, and he pushed for a sale to Bain Capital instead of a potential deal with fellow mutual insurer Royal London.
The Labour MP Gareth Thomas, who was a fierce critic of the Bain deal, told the Financial Times that Hartigan did not “deserve another payoff”.
The deal was eventually blocked by LV= members, who were concerned about losing one of Britain’s largest mutuals and feared that transferring power to a US private equity firm would put an emphasis on short-term profits at the expense of customer service and returns for members.
A merger between Royal London was later proposed, but talks broke down in February last year.
LV= subsequently launched a boardroom clearout, resulting in the departure of the chair Alan Cook and three other directors. Despite having assured in March last year that Hartigan would stay in his post, by July the insurer had announced he would leave.
Hartigan eventually stepped down in September and was succeeded by David Hynam, a former chief executive of the UK arm of the private healthcare firm Bupa and former chief operating officer at the insurer Axa.
LV= was founded in 1843 and traded as Liverpool Victoria until 2007.
