Two executive directors of Harland & Wolff were paid close to £3 million in wages and bonuses in the two years after the company they headed carried out a successful take over.
John Wood, this week terminated as chief executive officer, and Arun Raman, chief financial officer, were both paid more than half a million in bonuses in the seven months after the troubled Belfast shipyard was purchased for £5.25m in late 2019.
Mr Wood was paid £448,000 in wages for the year ending July 2020, while Mr Raman was paid £390,000, according to accounts filed by InfraStrata, the company that took over H&W.
They received bonuses of £554,000 and £519,000 respectively.
H&W and, through the company, Mr Wood and Mr Raman were asked to comment on the wages and bonuses.
“We will be unable to comment on this one,” a spokesperson said.
Prior to the October 2019 takeover, InfraStrata’s main business was the development of the Islandmagee gas storage facility. The company, which Mr Wood and Mr Raman joined in mid-2018, reported no revenue and had five employees in the year ending July 2019.
Company accounts state the bonuses “covered the extensive work” carried out in connection with the take over along with “historic deliverables and updated regulatory studies” related to the Islandmagee facility. Reported salaries included holiday pay and deferred wages.
Mr Wood received a salary of £212,000 from Infrastrata in 2018/19, then compensation totalling just over £1m the following year, including the more than half million bonus. Mr Raman was paid £97,000 in 2019, then £900,000 in 2019/20 during the year of H&W takeover, including the bonus.
Both received wages of close to half a million in the 17 months to the end of December 2021. According to the last filed accounts for the year ending December 2022, they were paid just over £350,000 each over that financial year.
In September 2021, InfraStrata, which was listed on the London’s alternative investment market (AIM) stock exchange, changed its trade name to Harland & Wolff Group Holdings plc.
Over the near five years since the take over, the company across its operations in the north and Britain has substantially increased the number of employees and secured several potentially lucrative contacts.
However, up front costs linked to attempting to build up the business and fulfil orders has led also to increasing losses, totalling £113m across 2022 and 2023.
The company was unable to secure UK government guarantees backing £200m in loans in event of defaults, with the UK’s Business Secretary Jonathan Reynolds stating there was “a very substantial risk that taxpayer money would be lost”.
In response, Harland & Wolff entered into talks with Riverstone for an emergency loan.
The shipyard owner confirmed on Thursday that its existing loan facility had been increased by another $25m to $140m “in order to improve and stabilise the liquidity position of the company and its subsidiaries”.
H&W Group Holdings, when announcing it had terminated Mr Wood as group chief executive, also said it will wind down “non-core business lines”. It has abandoned plans for a new fast ferry service between Penzance and the Isles of Scilly “with immediate effect”.
The company has appointed restructuring expert Russell Downs as its new executive chairman. Mr Downs and a second new appointee, Alan Fort, are due to join the board “as soon as the necessary on-boarding and due diligence procedures have been completed”.
H&W chairman, Malcolm Groat, said: “It is regrettable that we have taken the tough decision to terminate the fast ferry, but we need to focus our energies and resources in continuing to grow the core business across our four delivery centres.
“The board look forward to Russell Downs and Alan Fort joining us once their appointment formalities are completed and, in the meantime, I wish to place our thanks to John for his invaluable contribution to the company’s business and wish him the very best in his future endeavours.”
