Bitter sweet accounts


Detail in our annual accounts for the year to 30 June 2014, released yesterday, are bitter sweet.  It was a good year financially but the successes were underpinned by qualification for the Champions League.  This season’s revenue will be lucky to rise much above £50m, from last season’s £64m.

I see lots of comment on Peter Lawwell’s £400k bonus.  The key figure to concentrate on executive pay is the basic (in this case £524k), not the bonus.  Celtic executive pay, including manager, chief exec and scouts, should heavily incentivise qualification for the Champions League.  If we’re in the Champions League, all other objectives become possible.  Failure to qualify brings a range of risks; so the execs should feel the pain of failure in the pocket.

Basic pay should be appropriate for the work (this goes for all staff at the club, of course), but there is ample room to incentivise everyone, from executives, to kiosk staff, to stewards, on club performance or service objectives, as appropriate.  Would doing so tackle many of the stewarding and service issues we see regularly? Would be interesting to find out.

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  1. Neil canamalar Lennon hunskelper extrordinaire on



    “There may be a parallel here with the views of the largest shareholder and the majority of fans of Celtic, but her comments suggest that a ‘fan ownership’ model is likely to reduce very quickly to noisy factionalism. What then for Stewardship?”



    The German model would be my first argument to dispute her factionalism contention.

  2. The nut of the problem with our club is the Targets set by DD and the board for PL. PL has total control with all that happens within our club


    His targets are not CL qualification or bums on seats. If our profit was zero , but we had some star players ( remember them eh) and competed in CL then PL bonus would be limited.


    It is PL personal interests that only profits and cash flow are the only targets he has


    PL was brought into Celtic plc to stop rising costs , his whole career has been a cost reduction financial controller ( just google monktonhall coal mine and Peter lawell to see the mess he made there) we are now in a downward spiral on the football front directly because of his policies


    Would a change of CEO with the same targets make a difference


    I think yes due to PL history of being a zero investment financial controller



    We are in danger now of losing a generation of fans ,


    Boycott? Yes. But with diminishing crowds it might look like boycotts , but fans are just losing interest


    If PL stays Virgil will be sold, Scott brown will not have his high wage contract removed and we will be left with loan signings and crowds will drop further



    A few weeks ago we had our lowest competitive crowd since that night where” the rebels have won”

  3. Neil canamalar Lennon hunskelper extrordinaire on

    Do the trustees at the Celtic Foundation get paid or is it voluntary ?

  4. Paul67. For the 1st time in a long time , I agree with you 100%


    There should be no bonus paid due to our CL shambles



    Corporate failure

  5. the glorious balance sheet on

    Paul 67



    I agree that the ceo’s bonus should be predicated on CL qualification.



    That makes sense given the financial impact CL qualification has on the club. It would also incentivise the CEO to do something about our failing scouting and player recruitment practices.

  6. starry plough



    09:56 on 17 October, 2014I see the Hugh Keevins blow up doll is get a right good workout this morning…


    post of the day….:)

  7. The Battered Bunnet on

    Lunchtime Quiz:



    “Ally McCoist gives full backing to Dave King investment in Rangers”



    What’s the punch line?

  8. Phyllis Dietrichson on

    I agree that the CEO bonus (or at least a very large part of it) should be dependent on us qualifying for the Champs League.



    But let’s not forget how heartily we laughed when the zombies’ finance chief got a bonus for them getting out of the Third Division – didn’t we argue that his bonus should not be football-related?

  9. Southside



    liked it.



    What if preferred option is to stay in the bath but use sink ?









    10:12 on


    17 October, 2014


    My auld man’s definition of a snob is someone who gets out of the bath to have a pee.

  10. Celticrollercoaster supporting Shay,our bhoy wonder along the way on

    So next years accounts, no disproportionate bonus of 80% then as CL failure this year.



    Yes 80% but lets not focus on that! Just to be clear is that 2 years in a row at 80% that we need to ignore?







  11. Neil canamalar Lennon hunskelper extrordinaire on



    Agreed, 50% on the debt free condition and 50% on the team success! these are the two main concerns of both the money men and the supporters neither should be favourably weighted.

  12. Not that long ago we were all laughing at the bonus payments getting dished out at Ibrox,calling them “Spivs”.


    We have a club with dwindling support,top players sold every season,an unhappy support,for a lot of different reasons.A failure every year to plan properly for the CL qualifiers,a failure that bit us in the ass this year,in fact not since the days of the “Rebels”have I seen my club in such disarray.Yet the powers that be deem this as some sort of success story !!!!!.


    When a bonus is paid out for failure on so many levels,just how is that different from The Pieman and the “Spivs”filling their boots over at Ibrox?.

  13. So our failure to qualify for this season’s Champions League will impact on next years bonus.



    We’ll see.

  14. The Battered Bunnet on

    Cowiebhoy made a valid suggestion earlier.



    He said the CEO’s KPIs should be replaced with a set of 5 weighted Key Deliverables.



    In other words, the old Sales, Profit, Cash (and perhaps Share Price) set of KPIs no longer reflected the important performance criteria for the role, and instead, the CEO should be measured on the club’s achievements.



    He started off suggesting that 40% of the assessment be predicated on winning through to the last 16 of the Champions League, with the remaining 60% split 15% each across 4 other Deliverables (to follow).



    There’s a lot of merit in his suggestion, and I look forward to the rest of his thoughts.



    Inevitably at least 2 of these must be related to business sustainability, probably cash position and profit, but within boundaries, say a cash/debt position not exceeding 2 months’ operating costs, and a profit target of zero tax.



    What else should we be expecting?

  15. Incentives are fine, up to a point…



    I haven’t seen the accounts and I don’t know the current KPIs but…



    Is a bonus of 4/5ths of basic ever appropriate? It suggests some of the KPIs for bonus should really be targets to just earn the basic.



    From past memory some KPIs, to my mind, were subjective or at least open to interpretation leading to a difficulty in assessing how appropriate the targeting actually was/is.



    Are the KPIs subject to claw back? For example surely the very significant decline in ST sales AND match tickets should be of EXCEPTIONAL concern to the directors and shareholders…has/will that fact affect the bonus?



    Possibly wrong of me to comment without sight of the Accounts but I thought Paul’s comments were complacent and acquiescent. I’m uncomfortable with our CEO having a pay structure so similar to directors of other large British institutions who are blissfully unaware of the real world and the conditions which their employees and the public at large endure.



    Maybe too idealistic to expect any embarrassment from the recipients of totally outrageous greed?



    I have no beef with PL as a CEO. I’m sure he has done many beneficial things as well as making a few mistakes. That is not the issue. That a sum of near £1m being paid to anyone on the basis of a most ordinary season is just plain wrong.



    I haven’t posted for ages and lurk much less frequently as I found too much bitterness had swamped the site. Paul’s lead got my dander up (oooh matron) enough for me to do my Victor Meldrew thing!




  16. Brogan Rogan Trevino and Hogan supports Oscar Knox, MacKenzie Furniss and anyone else who fights Neuroblastoma on

    I think the point Paul is making is that the £450k bonus or whatever that was paid to PL was in respect of last year’s qualification for the champion’s league in reality.



    There will be no such bonus for this year.



    That is a given.



    However, the bonus is financially based and there was an ex gratia payment on top.



    None of that reflects on the mood of the core customer base which is disengaged with the supplier namely the club.






    From the last post, I disagree re the structure of the PLC missing the point or being amiss from the main argument.



    The fact is that the PLC structure by its very nature and by law takes those in charge of the company down a certain style of governance based on gaining a financial reward for those who invest.



    That is as it should be for a business. But is Celtic just a business or more than a business.



    You argue that there should be a cap on the shareholding that any one investor should be able to hold.



    That very suggestion is a departure from the standard PLC structure and in reality reflects precisely what I am trying to argue, although we have to accept that “ownership” and “control” are two different things.



    At the moment the number of shares “owned” by Dermot Desmond is different to the number “controlled” by the same man.



    By the way I am not someone who is wholly anti Dermot at all.



    However, the PLC structure means that those who own shares are the sole owners of the club. Those who do not own shares are therefore “outsiders” by legal definition.



    They may be “customers” ” season ticket holders” “supporters” even “employees” but they are not owners and never will be.



    The board of a PLC are solely answerable and beholding to the shareholders or owners and if there is a conflict between those owners and the supporters or customers then the employees and board members must do what is in the interests of the owners.



    That may be all well and good if you have a good owner or a number of good owners, but the entire model means that the ownership can be transferred by private bargain or on the open market to a third party without in any way involving those non owning supporters or even a certain percentage who are owners.



    I realise fully that my witterings will never change this but for me it is simply a matter of principle.



    It is an uncomfortable fact to face but for the vast majority of its entire history Celtic Football Club has been a private cash cow for a very few — the very antithesis of what Walfrid wanted to achieve.



    There are many “Great Celtic Men” who were happy to carry that label so long as the club, and therefore the support, functioned in such a way as to primarily provide them with a very substantial living first and foremost.



    This was true from the very earliest days.



    Fergus, for all the good that he did, was extremely honest about it. He wanted and created a structure which was first and foremost designed to make him a fortune. He of course stabilised the club in so doing, but a big BIG incentive for him was personal gain.



    Having now achieved a stable club, as you say the debate is about the quality and means of management and in my opinion the standard unedited version of the PLC will always create a social, emotional, philosophical and practical conflict with the ability of the owners to flog the company to the highest bidder at their whim.



    To be able to maintain that ability, such owners also have to maintain control over day to day management and so appoint managers who will follow their style and vision.



    Hence PL is PL and not say Martin Lewis — though some would say that both are money saving experts.

  17. jc2



    13:12 on 17 October, 2014



    That would be some feat.


    Ma sink is in ma kitchen.

  18. For all you horsey ghuys.



    TnT posted yesterday he was backing a horse today, San Telm, 3:15 Cheltenham.



    If odds are 14/1 or above he will bet each way.



    If odds are below 14/1 he will bet on the nose.



    Got 25/1 early price from Ladbrokes, who also confirmed if the horse wins at higher odds than that they will pay out on the higher figure.



    Feck me, do I sound as if I know what I’m talking about?




  19. O0n the subject of money.Just how is the proposed”Buy out”by King and Co,on any planet not printing “Red Tops”just what it says,”A buy out”.It is not a “Windfall”,or an”Investment”,or a lifeline for a struggling club.It is one mob handing over cash to another,who will walk out the door with it.Not a bean to the Leccy,the players,the Council Tax,etc.


    Now if this “Buyout”is successful,and thereafter Mr King pumps the fabled £30 million into the huns,then I would say,”That is an investment in the team,and should last well into next summer”.

  20. Didnt want to say handbasin else be shot down straight away as being Posh







    13:19 on


    17 October, 2014





    13:12 on 17 October, 2014



    That would be some feat.


    Ma sink is in ma kitchen.

  21. bournesouprecipe on

    Ole John Barnes says RD is lucky he doesn’t have Rangers, Super Casinos floating pitches,and double your money to contend with.

  22. The Battered Bunnet on




    A couple of quick points:



    First, the singular purpose of all companies, whether private or public, is to create profit to distribute to its shareholders.



    Paradoxically, Celtic’s formal purposes (above) do not square with the reality of the last 20 years in that we do not distribute profits, other than the coupon on the pref shares.



    From that perspective, we already operate a non-typical plc model. We can elect to adopt other non-typical formalities.



    Second, you have the Fergus example the wrong way round. He made his money by making Celtic a success. The success was the arbiter, not a random or unintended consequence of him making money.

  23. Paul67,



    This site gives great financial insight on a range of football topics, specifically football accounts, and I have learned many things over the years from my daily visits.



    However, regardless of the explanations given around corporate structure and pay I just can’t accept it, it does not feel right.



    My club had fallen to an unacceptable level and for the man at the helm to earn £1mil a year whilst overseeing it makes me feel sick.



    Celtic are at a real cross roads at the moment, I genuinely fear that the custodians are so far removed from the support that they are unable to make the correct decisions to take us forward, there appears to be a huge lack of morals at the top.




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