BOC chief's pay deal soars to £1.8m

THE chief executive of BOC saw his pay soar last year - even though profits fell for the second year running and the industrial gases group had promised to clean up its act on boardroom pay.

Tony Isaac was paid £1.8 million - a rise of 47%, according to BOC's latest accounts.

His package included bonuses of £1 million, half of which was a guaranteed payment related to 'his commitment and performance' during an abortive takeover attempt in 1999 by rival gas groups Air Liquide and Air Products, says the annual report.

BOC also gave Isaac a 60th birthday present, topping up his pension reserves by £423,000.

The company has a long history of high pay for its bosses, including Richard Giordano, Britain's highest-paid businessman when he ran BOC during the Eighties.

The group has just completed a review of its pay policy following fierce criticism from its investors about excessive levels of executive rewards.

The accounts state that the company 'decided that a realignment was necessary' and that 'performancerelated remuneration should form a substantial element of total remuneration'.

The rethink on directors' pay follows a series of heavyweight nonexecutive appointments to the board, including Smith & Nephew boss Chris O'Donnell, former Goldman Sachs managing director Roberto Mendoza and former Yahoo Europe chief Fabiola Arredondo, who are responsible for setting executive remuneration.

Change is afoot already. Isaac was one of four executives who last month signed new contracts cutting the notice period BOC is required to give them from two years to 12 months - in line with corporate governance best practice.

Under the proposed long-term incentive arrangements, 90 top executives could earn up to 200% of their salary in bonuses if certain performance targets are met.

Shareholders will have a chance to vote on the plan at next month's annual meeting.

BOC has been hit by the slump in the semiconductor market, for which it makes ultra-pure gases used in the manufacture of electronic chips. A cost-cutting programme has seen 1,500 jobs go since August 2001.

Despite the cull, pre-tax profits fell from £362m to £335m in the year to September.