Ferguson Marine chairman defends bonuses paid to senior staff
Andrew Miller told MSPs the payouts were essential in recruiting and retaining staff at the Port Glasgow shipyard
Last updated 1st Jun 2023
The Chair of the Ferguson Marine board claims the yard's future could be at risk - if bonuses are not given to senior management.
Bosses at the Port Glasgow shipyard are in line to receive more than £130,000 over two years - despite two new CalMac ferries being years late and 3 times over budget.
Payments needed to attract and retain staff
While being questioned by MSPs investigating the problems with the delivery of the two new vessels – including one which will serve on the route between Ardrossan and Brodick – chairman Andrew Miller said the payments are needed to attract and retain the best staff.
He claimed that without such payments "the future of Ferguson Marine yard is at risk".
The two vessels, the Glen Sannox and the as-yet-unnamed hull 802, are now not due to be completed until the end of 2023 and the end of 2024 respectively.
Build costs for the ferries, which CalMac plans to use on its Clyde and Hebridean services, have risen from £97 million to about £300 million.
Bonuses have been branded "reprehensible"
Then deputy first minister John Swinney branded the bonus payments - which were made without Scottish Government knowledge despite ministers having taken the yard into public ownership in 2019 - as "reprehensible".
But Mr Miller defended the payments when he appeared before MSPs on Holyrood's Public Audit Committee on Thursday.
With the shipyard operating in a "highly competitive market", the chairman said: "It's very important we find the talent for the senior management, it is also very important we retain the talent for the senior management, in terms of completing our journey towards eventual profitability in our five-year plan. That is all very important to achieve.
"Future of yard at risk" without payments
"We've got to be competitive. I don't understand the narrative around the word bonus. These are retention payments.
"If these elements are removed, without being competitive, the future of Ferguson Marine yard is at risk."
Mr Miller insisted he has "due regard to the public money that has been invested in the yard".
Committee chairman Richard Leonard pressed him on the issue, saying the ferries are now "five years late and counting and three-and-a-half times over budget".
He added: "It beggars belief that these bonus payments are being paid."
Bonuses should be "connected to performance and delivery"
SNP committee member Willie Coffey said: "There's a reasonable expectation that bonuses or incentives would be somehow connected to performance and delivery, rather than to competitiveness and retention of staff."
He said the committee had been "genuinely surprised" to learn about the bonus payments in a report from public spending watchdogs in March.
Mr Miller told the committee the yard is "accountable", but he went on to insist: "The business has got to remain competitive in the open market.”