JIM SUTCLIFFE has resigned as chair of the Financial Reporting Council’s (FRC) codes and standards committee with immediate effect – just three days after taking up the role of Quindell’s deputy chairman and taking 10.9m share options.
Such a situation was deemed untenable as it appears to conflcit with the FRC’s corporate governance code, which recommends non-executive directors are prevented from takings options in a company as part of their remuneration packages.
According to the code, shareholder approval should be sought in advance and any shares acquired by exercise of the options should be held until at least one year after the non-executive director leaves the board.
The FRC stressed that it was “Jim’s decision” and refused to be drawn on whether the accountancy and audit profession’s watchdog would have had to force him out if he didn’t fall on his own sword.
Troubled insurance claims processor Quindell is still reeling from the recent departure of its founder and chairman Rob Terry, after news emerged that he and a brace of other executives had purchased company shares by taking out a number of loans against stock holdings to do so.
Quindell has showered over £25m in stock options on the firm’s new chairman, deputy chairman and current executives. Sutcliffe, who joined the FRC in 2012, was granted 10.9m company’s Ordinary Shares of 15p each with exercise prices from 68.65p.
Tim Bush, head of financial analysis at PIRC, said it was “impossible to overstate how unacceptable” it was that the chairman of the codes and standards committee could remain in place given the circumstances.
The FRC confirmed that Nick Land, a current member of its board will replace Sutcliffe on its codes and standards committee.
Sir Win Bischoff, chairman of the FRC, said: “I wish to thank Jim Sutcliffe for his commitment and service to the board and his effective leadership of the codes & standards committee and before that the board for actuarial standards of the FRC.”