Camelot risks new row over ‘fat cat’ pay rises

Lottery operator hikes senior director’s pay while achieving only modest gains for Good causes

National Lottery operator Camelot risks provoking a fresh storm over “fat cat” pay after handing out pay rises of up to 45% to senior directors as a reward for achieving a modest increase in returns to Good Causes.

Chief executive Dianne Thompson saw the “grand total” of her pay soar to just under £1m for the year ending March 31, an increase of 45% compared with 2004 to 2005. This includes a bonus of £282,000.

Meanwhile commercial and operations director Phil Smith’s “grand total” has leapt 40% to £542,000, with a bonus of £143,000.

Payments to non-executive chairman Sir Peter Middleton have spiralled upwards to £195,000. In total, remuneration for executive and non-executive directors has jumped 35% to £2.8m, partly reflecting the appointment of two extra executive directors. The figures are revealed in Camelot’s annual report for 2005/6.

The mammoth pay hikes come as the company reveals that its operating profits for the period were flat, rising under 1% to £48.7m on sales up 5% to £5bn. Returns to Good Causes, a key figure on which Camelot’s performance is judged, increased by 3.7 % to £1.4bn. The company says all staff were eligible for their full bonus entitlement “as a result of this year’s exceptional performance in exceeding the challenging targets for sales, profitability and returns to the Good Causes.”

Meanwhile, Camelot has appointed Adam Crozier, chief executive of Royal Mail Group, which owns a 20% stake in the lottery operator, to its remuneration committee. The appointment is being vetted by the National Lottery Commission. He was paid £2.7m last year, making him the highest paid public servant in the UK. A part of his role will be to decide how much Camelot directors should be paid.

When Marketing Week revealed fat cat pay rises for Camelot directors in 1997, newly elected Prime Minister Tony Blair said he was “outraged” by the news. However, the 1997 payments were far lower than this year’s, with the then chief executive Tim Holley earning under £600,000, compared with Thompson’s £947,000 for 2005/06.

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