I'm committed, says Equitable 'part-timer'

Jeff Prestridge, Mail on Sunday
4 December 2005

FOR Equitable Life workers, it was a shocking sight. After struggling through the London rush hour traffic to get to their jobs, they came face-to-face with Charles Thomson, the £1m-a-year boss of the beleaguered mutual.

And it was a Friday. Most Fridays, 57-year-old Thomson is nowhere near the office. He's usually more than 400 miles away in Scotland in his £1m mansion that he shares with his lover and former secretary Verity Coutts, 29, and their baby daughter.

But Thomson had a good reason to be at work that day - he had a fresh embarrassment to deal with.

Equitable had abruptly abandoned its legal case against its former directors for their roles in bringing the giant mutual to its knees in the late Nineties.

The legal bill racked up by Equitable in its fruitless four-year pursuit of 15 former directors and its auditors Ernst & Young for £3.7bn was an astounding £45m.

Quickly dubbed the '£45m man', Thomson is now also derided by some as 'Mr Part-Time Boss' and his command of the group is being openly questioned after Friday's climbdown. 'He's a waster,' says Paul Braithwaite of the Equitable Members' Action Group, which wants Thomson and chairman Vanni Treves to stand down immediately.

Though others are not as disparaging, they question Thomson's commitment to the Equitable cause.

'Thomson has a dream job,' said one Equitable insider on Friday. 'Most weeks, he waltzes into work some time on Monday, spends Tuesday to Thursday in London, where he has a second home in The Barbican, then swans off to Ayr on Thursday night to spend quality time with Verity and the baby.

'It's not a bad arrangement for someone who will almost double his remuneration this year as a result of picking up a series of bonuses.'

At Equitable's annual meeting in May, nearly 40,000 members voted against Thomson's pay package. So far this year, Thomson has received 'retention' bonuses totalling more than £206,000, a discretionary bonus of £184,196 and, provided he lasts until December 31, he will receive another £75,000 - all on top of salary and benefits that will exceed last year's £500,000.

Another incentive scheme is being drawn up that will reward Thomson richly if, as seems likely, the mutual's business is broken up and sold to the highest bidders.

In the past two months, half-a-dozen companies, including Prudential, have inquired about buying its with-profits fund or its annuity business.

Thomson's rule at Equitable has been dotted with controversy. He was appointed in 2001 after Equitable was ordered by the High Court to honour expensive financial promises made to policyholders. That left the society teetering on the edge of bankruptcy with a £1.5bn black hole, and forced it to close to new business.

But Thomson's troubles started even before he joined Equitable. He admitted during the proceedings against Ernst & Young in the High Court in April to 'largely writing' his own glowing references for the job.

The reference appeared to come from his former boss at Scottish Widows where he was deputy chief executive, but comments such as 'we will miss his intellect, integrity and energy', and 'he will bring great value to other organisations at the highest levels' were written by Thomson.

Since he took the helm, several directors have left, fuelling the suspicion that Thomson wants to rule Equitable unchallenged.

'With him, it's my way or the highway,' said one insider.

And possibly most controversial of all, there was the affair with his secretary, Verity Coutts. He moved out of his family home in Bearsden, Glasgow, and he and Pamela, his wife of 35 years, are now divorcing.

On Friday, both Thomson and Treves dismissed 'absurd' claims that Thomson has been distracted by his personal life.

'Wherever I am, I'm always at the end of a phone,' said Thomson. 'Yes, I work from home on occasion, but I've been dedicated to the Equitable cause seven days a week for the past five years and I give 100% commitment.'

Treves said Equitable was substantially stronger than at any time in the past five years as a result of Thomson's leadership.

'The prospects for policyholders are much better,' he said. 'There have been many occasions when I've dragged Thomson back from holiday. If he was not full time in his commitment to Equitable, he'd be out of here in a nanosecond.'

But for many of Equitable's 750,000 policyholders, distressed by five years of financial despair, that nanosecond cannot come too soon.

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