CRH chief executive Albert Manifold's total remuneration package dipped by 5 per cent to €8.23 million last year as a slump in the building materials giant's share price last year hit total shareholder returns and executive awards under a stock bonus plan.
Mr Manifold, head of the group for the past five years, saw his basic salary and pension benefits increase marginally to €2.22 million, while his performance-related pay declined to €6.01 million from €6.5 million, according to the group’s annual report. His remuneration peaked at almost €10 million in 2016.
Chief financial officer Senan Murphy's total compensation rose to €2.74 million from €1.9 million. When Mr Murphy joined the company in 2016 from Bank of Ireland he was not able to participate in an existing long-term share bonus scheme. However, he benefitted last year from a long-term incentive plan introduced since his arrival.
CRH reported last week that its earnings before interest, tax, depreciation and amortisation rose by 7 per cent in 2018 to €3.37 billion, allowing it to generate a record €2.4 billion in free cash. However, the stock came off 23 per cent during the course of the year.
CRH's remuneration committee chairman Richie Boucher, former chief executive of Bank of Ireland, said in the annual report that he engaged with shareholders representing 70 per cent of the building group's issued capital between October and January as he reviewed executive compensation.
As a result, the company is introducing a performance metric for return on net assets (RONA) in compiling share bonus awards from this year.
“In discussions with shareholders, we emphasised that all targets – particularly those for RONA – needed to be seen in context of the economic cycle and other factors such as portfolio management and mix,” Mr Boucher said. “For example, RONA is generally negatively impacted by material acquisitions in the initial years post-acquisition as integration and performance-enhancing measures are implemented.”
Shares in CRH have risen 19 per cent so far this year, helped by a global equities rally and the arrival of an activist investor, Cevian, on the company’s share register. The stock has also been helped by executive comments last week that CRH may follow up its current €1 billion share buyback programme with further repurchases.
