Ferguson Marine chief gets £20k golden hello in bonuses 'scandal'

It has led to new concerns about the bonus culture at the shipyard firm delivering two long-delayed ferries which has received over £450m of public money and has led to new calls for a public inquiry.

It comes in the wake of a row over the chairman of FMPG saying that controversial bonuses were expected to continue to be paid - despite the First Minister saying at the end of April that he did not expect them to continue.

Andrew Miller, chairman of Ferguson Marine, who is leading a review into the payment structure at the year, said the bonuses were "retention payments" and that senior managers were legally entitled to them under their employment contracts.

It came after a secret bonus bill to Ferguson Marine management reached £134,218 over two years, while the two ferries - Glen Sannox and Hull 802 - are still to be delivered with costs expected to quadruple from the original £97m contract.

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The Herald can reveal that Ferguson Marine chief executive David Tydeman, who is on a £205,000-a-year basic salary received around £57,500 for the first two months of his appointment - over £20,000 more than the pro-rata rate.

Ferguson Marine's financial records do not show that Mr Tydeman received any further bonuses in the two months and that the payment was pure salary.

But it has been confirmed that the extra payments in terms of salary were given in the form of "recruitment costs" and a relocation package for Mr Tydeman establishing a base in the local area.

It has emerged that he is eligible to gain a 30% bonus for the last financial year of 2022/23 - although it has yet to be finally agreed.

In response to Herald questions over the space of a week, publicly funded Ferguson Marine laterally said he would qualify for a "small portion" of that, but refused to say what that amounted to.

Details of Mr Tydeman's 30% bonus package had previously been kept secret by the shipyard firm, and blocked in at least one Freedom of Information request.

But a confidential memo from the Scottish Government's commercial interventions department on Mr Tydeman's remuneration package states that recruitment consultants had advised them that elements of his pay package including relocation allowance and bonus arrangements were "expected" for an "appointment of this kind".

Highlands and Islands MSP Edward Mountain, the former convenor of the rural economy and connectivity committee whose probe into the construction of the ferries for CalMac branded the management process a "catastrophic failure" said: “There seems to be no end to the bonus culture at Ferguson Marine.

“What I find astounding is that this benefit package was not disclosed at the outset. I made several requests to the Scottish Government in early 2022 asking about David Tydeman’s salary details and no indication was ever given about a golden hello."

Mr Mountain, who is now convener of the net zero, energy and transport committee which is concluding an inquiry into how to have a modern and sustainable ferry service for Scotland added: “This smells of secrecy and that’s why we need still need a full inquiry to uncover the full truth of the budget overruns and long delays impacting the delivery of vessels [Glen Sannox] and 802.

“It is frankly shocking that as directors continue to collect hefty pay cheques, our island communities are left paying the price with a ferry network in constant crisis.”

The Herald has been told that Mr Tydeman's performance for the year to the end of March 2023 "in terms of an incentive payment" is under review and is being measured at unspecified 'key performance indicators'.

It has already been confirmed that £87,000 has already been paid to certain members of the management team for performance in 2021/22 with a further £47,000 more expected in 2022/23.

And the Ferguson Marine chairman has agreed that it is perfectly reasonable that performance payments continue to be paid into this financial year.

He has told MSPs: "It is because it is contractual, [these are] points of law and they do exist, and it's very difficult to say to someone we're just pulling that from your contract."

Mr Miller has insisted some sort of bonus scheme should be retained at FMPG in the future for the company to be viable.

The Scottish Government had previously said that the bonuses for 2021/22 and 2022/23 were legally required to be paid.

READ MORE: Ferry debacle has made Scots transport minister 'the job few want'

The head of Scotland's public spending watchdog said at the end of last month that moves for a shake-up over governance rules at Ferguson Marine had still to be resolved despite a row over the bonuses paid to executives.

Auditor General Stephen Boyle said in April that a revised performance framework for Ferguson Marine's senior managers and chief executive was still awaiting approval and consideration by the Scottish Government.

He said that spoke to the "lack of clarity" over how the Scottish Government expected Ferguson Marine to operate.

He said he doubted the controversial bonuses paid to bosses at Ferguson Marine can be recovered and described the payments as “unacceptable”.

The bonus culture concerns come despite an outcry over the more than £2000-a-day remuneration, made up of fees and expenses given to Ferguson Marine's previous Scottish Government-appointed turnaround director Tim Hair who left his post in February, last year.

The Scottish Government defended the payments to Mr Hair as being "in the middle of the industry norm".

The yard, which was rescued from administration by the Scottish Government at the end of 2019, has struggled to complete delivery of the ferries pushing the delivery date for the Glen Sannox and as-yet-unnamed hull 802 to the end of this year and 2024, respectively, five and six years later than originally planned.

George Crookston – one of those who benefitted from the bonus scheme – left his post in mid February, after being appointed in March 2020. He is also no longer a member of the board, which serves as its governing body.

Mr Crookston, received incentive payments as part of the controversial bonus scheme of approximately £17,500 in 2021/22.

That was on top of a remuneration package made up of approximately £122,500 in salary and £6500 in pension benefits.

The management bonus is said to be in two parts, 7.5% to be paid upon delivery of the hull of the Glen Sannox and “a further 10% discretionary element”.

The payments have been made despite the Scottish Government's public sector pay policy maintaining a suspension of performance related bonuses since the shipyard firm was nationalised in 2019.

It did not apply to the shipbuilding firm, because ministers decided it did not have to comply, and remains off the long list of public sector bodies that are covered by the pay rules.

This was confirmed in an agreed operations framework with the shipbuilders.

One ferry user group official said: "It is a quite frankly scandalous that the man who is the face of Ferguson Marine should be even considered for a bonus at this time after all that has been said by their paymasters, the Scottish Government about ending that culture. While we all look forward to the delivery of the ferries in the near future, the fact is that there is no credit to be gained from delivery so late in the day and at such a cost to both the taxpayer and islanders who are suffering every single day through a failure in vessel resilience."

On March 16, the then First Minister Nicola Sturgeon when asked about the bonuses criticised by Audit Scotland said: “New arrangements have been put in place to ensure that the situation does not arise again in the future."

And her deputy, John Swinney the same day agreed with the criticism of the bonuses and "assure Parliament that new arrangements have been put in place - at my request - to ensure such an eventuality does not arrive in the future".

An FMPG spokesperson said: “Mr Tydeman may be eligible for a small portion of his incentive payment in terms of delivering new business and creating a future for the shipyard, but that is yet to be agreed.”