Clifford Chance accounts reveal bumper pay of management committee
4 October 2012 | By Joshua Freedman
25 February 2013
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Clifford Chance distributed an average of £1.19m to partners and employees on its management committee during the 2011-12 financial year, totalling a payout of £19m for its 16 members.
The management figures encompass two employees and fourteen partners including global managing partner David Childs, London and Middle East chief David Bickerton and Asia regional managing partner Peter Charlton.
Their earnings of £19m during the year, revealed in the firm’s LLP accounts filed this week at Companies House, were 10 per cent up on the £17.3m taken home by the 16 members in 2010-11, although this can be because partner members were moved up the equity, plateau partners were added to the group or employees received pay rises.
The increase compares with a 7 per cent increase in average profit per equity partner at the pure-lockstep firm in 2011-12 (3 July 2012).
A firm spokesperson said: “Remunerations of partners on the management committee is exactly in line with the rest of the partnership. It’s same same remuneration model.”
The remaining members of the committee, according to the firm’s website, are global COO Amanda Burton, global banking head Mark Campbell, German managing partner Andreas Dietzel, capital markets head David Dunnigan, tax, pensions and employment chief David Harkness, continental Europe representatives David Harkness and Yves Wehrli, global corporate head Matthew Layton, global real estate head Alfonso Benavides, Americas head Craig Medwick, executive partner and general counsel Chris Perrin, CFO Stephen Purse and global disputes head Jeremy Sandelson.
Separately, the accounts reveal that the firm’s defined-benefit pension deficit broke the £100m barrier, rising 12 per cent from £99.9m in 2010-11 to £111.8m in 2011-12. The deficit has increased every year since 2008, when it stood at £45.2m.
The firm’s pension obligations in 2011-12 were £378.7m, while its funds earmarked for distribution were £266.8m, giving net obligations of £111.8m.
The hike is partly based on changes in assumptions made by independent actuaries, which were brought in to advise on the defined-benefit scheme for employees. For instance, the discount rate was adjusted from 5.5 per cent in 2011 to 5.1 per cent in 2012.
The firm reached an agreement with its pension trustees during the 2010-11 financial year to pay off the deficit through a series of top-up payments over the course of roughly the next seven years.
The defined-benefit scheme was closed to future accrual with effect from 30 April 2011 and closed to new members in 2005, although a defined-contribution scheme still exists for employees.
A Clifford Chance spokesperson said: “It is entirely standard practice for any organisations with pension or annuity schemes to work with professional actuaries to establish and review on a regular the assumptions underpinning calculations of the organisation’s obligations, liabilities and assets.
“As the report states, we have a plan in place to correct the deficit in our defined-benefit pension scheme, through a series of top-up payments over the next seven or so years, as agreed with the trustees.”
The firm’s salary payments and remuneration of non-partners rose 5 per cent from £425.1m in 2010-11 to £444.5m in 2011-12. Other staff costs rose 12 per cent from £63.7m in 2010-11 to £71.2m in 2011-12.