Diageos CFO saw her pay packet double

Diageo's CFO saw her pay packet double

Ex-Diageo CEO Paul Walsh is to stay with the company for up to another five years to promote the company's Scotch whisky interests.

Walsh, who stepped down from the group as CEO last month, will be “retained in a role with the Scotch whisky industry on behalf of Diageo”, according to the company's annual report, released yesterday (12 August). The former CEO, who is also staying on to assist replacement Ivan Menezes for a year, will be paid GBP80,000 (US$123,700) annually “for a period of up to five years” for the role, the report said.

Walsh, who is joining catering group Compass as chairman next year, was paid GBP14.8m in his final year of work, a 30% increase on the year before, the report revealed. 

The rise came from a surging Diageo share price that saw performance-related incentive plans boost Walsh's basic salary by ten-fold, despite a 32% drop in annual bonus. Diageo CFO Deirdre Mahlan, meanwhile, saw her pay increase by 110%.

Walsh earned GBP1.3m in fixed pay for the 12 months ended 30 June, the report said. However, 83% of his total pay is in incentives linked to Diageo's share price, which has risen by 80% over the past three years.

Mahlan also benefited from the share price jump, earning a total GBP6.7m despite a 29% decrease in annual bonus. New CEO Menezes next year will get a basic salary of GBP1m. 

In 2007, Diageo was forced to defend Walsh's take-home pay of GBP5.1m after a UK trade union official branded it “morally offensive”.