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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There is something a little odd about having an executive bonus dependant on football results for me. I’m not sure how to devise a system that rewards on the actual job of the CEO – to have a team on the park capable of delivering the football objective – rather than the job of the manager, which is to deliver the results.
A scenario: it’s the CL final play off. We draw the first leg 0 – 0 away. We stand at 1 – 1 at home in the 91st minute and are awarded a penalty. If the penalty is scored we go through and the CEO gets a big bonus. If it is missed we fail and he gets zero.
Now is this fair? Is his performance as CEO any different if a penalty is scored or missed? In either situation surely he has delivered his part of the job by putting a team on the park with the capacity to reach the desired footballing objective.
One for discussion really. I don’t have the answer as it is easy to measure performance objectively when based on football results, but totally subjective when it comes to measuring potential or judging capability.
Gordon j…,
The penalty taker will be on a win bonus, he along with the team manager and coaches will have been put in place by the CEO, so yes the CEO is responsible for the product on the park. In my expert opinion :)
“the £25k a week Lawwell “earned” last year.”
Things could be worse….this guy could be doing our accounts.
LIVING WAGE AT CELTIC PARK
By the way, on PL’s bonus…
Under the new Exec Scheme, he is entitled to a maximum of 60% of his salary as bonus, performance dependent. That would be around £300,000 being 60% of his £500,000 salary.
The Non-execs considered that for the last financial year, he should be awarded full bonus, but that this did not reflect the additional ‘value created’, and thus elected to award him a further sum – around £100,000 – ex gratia.
Gordon_J
CEO is responsible for employing the management team, the couting team and all football related contracts.
Surely then he holds ultimate responsibility for success and failure on the park given football is the focus and main product of Celtic PLC.
MWD said AYE
TBB
Re Fergus and success being the arbiter.
Hmmm of course success on field and off was the arbiter, however he organised the structure of the company in such a fashion as to make himself a fortune and from the outset he believed he would and could do that.
He did not walk into Celtic park with any intention other than personally making money first and foremost.
Of course he wanted success for Celtic – there is no doubt about that – but he saw the entire situation as a business opportunity which he grabbed with both hands.
He was never up for a structure where the club was made financially safe without him achieving a handsome personal reward.
That could have been achieved but was never his agenda, and to achieve his personal program Celtic had to be successful — or at least more successful than it had been under the old regime.
And of course the structure of the PLC that he left behind is no longer with us and that was always going to happen because the PLC is not a structure that covers what he was trying to achieve in the long term which was a hard core of fan ownership.
Doesn’y work!
Silly me, it is 3 years at 80% we need to ignore, not 2 years!
HH
CRC
100k ex gratia – free gratis and for nothing.
The Battered Bunnet
13:38 on 17 October, 2014
Last 3 years, the non-Execs have waived that magic wand and removed the word “maximum” from the world of remuneration.
So maximum is removed whist at the other end minimum is maintained.
HH
CRC
If only we had a good team on and off the park
.
We would all be saying, going to watch the Celts would be a( Bonus)
Remember the days when we had to get, away-end tickets to most grounds
because of the demand.
Now we cant fill our own ground, and the likes of Aberdeen reduce the tickets to US
This is how far we have gone down the pecking order.Pash team Pash manager and Pash board.
Roll on the morra cant wait for the game.
Hail Hail
bsr,
Yep, for nothing, while they tell us every, penny is a prisoner and we can’t afford to pay a living wage or better player. I smell shit
From what iv read/heard over the years lawell is very much a celtic fan and before he got ceo job he was going to matches home and away and obviously pay
Executive pay is a disgrace, including Celtic’s.
Gordon J – suggesting that incetivising the CEO on football results is risible.
Its really quite easy – have a sliding scale of incentives based on:
League Win
CL Qualification
CL Group Qualifcation
Scottish Cup win
League Cup win
Given our relative strength in scotland the bonus levels for League win would be lowish and then slides up for cup wins – a treble would be a higher bonus.
So you could cover 50% of the bonus in this way and 50% around financial strength (which would include number of season books/actual attendance, customer complaint levels etc etc). This would ensure balance in decision making.
It is perfectly clear that the balance is not there. For Paul to ask us to forget about Lawwell’s bonus isnt just laughable – its simply insulting. Its also interesting how quickly we want to move on to the consequences of the not qualifying this year. After all its great to try and scare the support with tales of financial woes – just a bit difficult to convince us when we are told how fantastically well run we are as a business.
On one level I could accuse the board of insensitivity with their decision to top up Lawwell’s bonus this year – while the club is clearly falling apart on the pitch and in the stands. Of course we will get arguments around the timing – this is last year blah blah blah.
But on the other hand I could accuse them of greed, corruption (paying bonuses while the business is showing signs of failure) and contempt for all of its supporters.
One things for sure – they can stick their SB up their behinds next season and I wont be back this season.
As others have said – we laugh at the huns – but quite frankly we looking like them at the moment.
Folks , anyone up for a “ flash mob “ at St Anthony’s on 25/10 ?
Celtic are at home to Astra on Thursday 23/10 then home again to Kilmarnock on Sunday 26/10 .
St Anthony’s are at home to Dunipace in the Scottish cup on Saturday 25/10 , 2.30 pm kick off .
An honest and whole hearted game of football and all for £4 .
It may be the only one you see in the hoops this season LOL
McKenna park is on Shieldhall road , one mile from Ibrox
PS the ants have a fantastic playing surface .
The length of PL’s tenure at Celtic does seem like an awfully long time for a CEO to be in situ. Maybe he needs a new challenged? Maybe he should be “new challenged” out of the door like NL…
Paul is absolutely correct,
we should stop focusing on Peters bonus, thats an incentive.
Now on to his actual base salary , a “basic” £524k.
He aint worth it.
I will do it for 10% of the salary, and I think I could deliver similar results.
Over-rated, over paid, and over stayed.
canalamar
No Champions League this year, no bonus next year?
But there’s all these loanee’s and little spend, so they could just do all ex gratia.
CEO is a good number if you can get it.
From what iv read/heard over the years lawell is very much a celtic fan and before he got ceo job he was going to matches home and away and obviously paying for that privilege.
Would he be happy forking out again to watch current team and where his hard earned money was going… Espcially if he was on a more modest wage like most of our fans… I dont think so.
Looks to me Lawell has become same as alot of players… Income first income last and income overall.
And… His bonus was for CL qualification… Same one we just about got into after struggling over the 2 games against karagundy due to not replacing key players leaving.. He won that gamble.
Went for it again this year and didnt get it…
So will nxt year mean he will maybe give the gaffer a proper budget that will secure 20+m if we qualify and get him his crazy bonus ?
And that bonus sure as hell doesnt go in line with the celtic tradition values or ideals we often here about on this blog.
Paul67 –
You say PL’s bonus should be based on CL qualification and I agree absolutely.
In the year ending 30 June 2014, Celtic qualified for the CL, so PL’s bonus would appear to be warranted.
Or am I missing something?
Is being able to keep your job on a top salary not incentive enough?
Fred Colon –
Is big Kev from Edinburgh still on the committee at St Anyhony’s?
Stadivarious Gefinor Cambuslang.
And in other news it has just been announced that Breaking bad will return for a sixth series with a plot that is so stunning that it is hard to imagine!
I am the one who knocks!
Fred Colon
Are you trying to organise a Hootenanthony??
I’ll go out on a limb here, I expect…
PL was bonused on LAST YEAR’s performance, where we won the league and qualified yet again for the Champions League, delivering a sustainable operating performance and a lumpen profit from player sales.
The problem is that it was last year, and the sentiment is flavoured with poor football results recently.
As Paul points out, without Champions League income, and with a drop in season ticket sales (despite a substantial discount in the price) this year the financial results will be somewhat different.
Accordingly, one would expect his bonus to reflect that, but we won’t know for another 12 months.
My fag packet says:
Income £48M
Operating costs £58M
Amortisation £4M
Exceptional & Other Costs £2M?*
Loss before player trading: £16M
Gain on Fraser Forster, Tony Watt, others: £10M
Net Loss: £6M
Cash: negative £2M
*We don’t have a lot of player value left to write off
Unless something remarkable occurs in the Europa League, we will close the year having lost about £6M, but with the receipts from June 2014 trade debtors will actually increase cash at bank to around £12M**
**We have by now received most of the debtors figure outstanding at June 2014. Our spending on players in January is traditionally small beer.
The major problem with Celtic’s position right now is that we have neither Champions League income, nor a shop window full of Wanyamas and Forsters.
We do though have a shed load of money in the bank. Although the accounts have net Cash as £3.8M, we have a trade debtors increase of £14M, less a £3M increase in trade creditors.
Our true liquidity position is thus £15M, and we have done nothing with it that impacted on Champions League prospects or “talent acquisition”.
Accordingly, the cash will be used to cover the losses (per Forster above) caused by having neither UCL nor talent to trade.
Football clubs cannot sit on cash. It adds nothing to the performance of the company or the team, and simply results in the money being lost.
This is our biggest issue.
In my view.
“One things for sure – they can stick their SB up their behinds next season and I wont be back this season.”
Well said Neganon2. A man of honour and principles who stands up for what he believes.
Not like guys like that Neganon1 who spouted the same guff last year and still bought a SB.
I despair that anyone on close to £10,000 a week needs a bonus to do their job well.
The majority of people on here, I suspect, get paid no bonus and if they don’t do their job properly are let go.
Celtic – more than just an Executives Bonus
Celtic – more than an absentee owner’s abandoned pet.
TBB
Agree with yer fag packet calcs.
Those figures also call into question the stated “philosophy” of getting by on qualifying for the Champion’s league 3 years out of 5 or thereabouts.
Paul has always said that we cannot maintain finances based solely on Champion’s League income.
In my opinion, the board will hope that the football turns between now and the new year and that in the second half of the season income goes up as a result of participation in the later stages of the league cup, The Scottish Cup and of course the league.
However, little is done to encourage income away from Football itself. There is n o encouragement of “That Celtic Feeling” and consequently there is no revenue from the exploitation ( in the best sense of the word ) a fanbase that feels proud to be Celtic and part of Celtic.
That is a business failing right there.
I hate to be critical of people in their jobs but marketing and PR are such an important part of modern day business and they are mismanaged aspects of the Celtic operation with the result that we are far too heavily dependent on sheer football related finances.
We need some attractions to get bums on seats – better players, a greater sense of self and pride, a degree of fun and passion in being a Celtic supporter – and I don’t see the current business attempting any of that at the moment.
Geordie Munro 13:36 on 17 October, 2014
Factor in his pension contributions plus other perks, £25k per week is in the right ball park area for Lawwell? If it turns out to be nearer, £20k per week, that’s still obscenely high and he is remains a corporate fat cat suit with his nose in the trough.
“I despair that anyone on close to £10,000 a week needs a bonus to do their job well.”
Yorkbhoy, there are football players on 10k every few hours who receive bonus payments for doing their job well.
Paul
I’m assuming that’s just a starter on analysis? Pretty meek stuff.
Lawell bonus is a major deflection and guess what…. yup…. that’s all anyone is discussing.
The accounts say we rose season tickets from 41k to 43k. Really? How many £50 books instead of £500 books. That’s a revenue deduction of £450 per book, but we can’t see the numbers.
If sales this year are ‘similar’ that means that about 50% of book holders aren’t going on any one day. That’s a lot more worrying that a £400k bonus.
Perhaps a bonus tied to a safe standing area or challenge to the SFA/SFPL on rule applications and safe stewardship of football might be more relevant?
Did Brian Wilson just trouser £25,000 for being there whilst voting against the living wage?
£1m in Board remuneration. Really? That’s 2% of total income?
DD made no appearances at any meeting or committee? That kind of executive performance would see someone automatically removed from most companies’ governance?
Last year we made money, but only due to player trading.
So…. according to the Board every penny is reinvested in the club…… but it isn’t is it?
Neigh on 4% is leaving the club directly via executive trouser pockets.
The commentary seriously focuses on Celtic as a PLC and money. It really doesn’t connect to the idea that supporters are interested in the team, performance and results. Better pie’s ipads and wifi may all be part of the experience but actually………. give me a standing area 10 times the size of the GB allocation filled with youthful emthusiasm, attacking play, players that go through walls irrespective of their ability and I’ll give you a real match experience.
The current performance on key ‘experience’ indicators suggests its time for change and not just in approach to football.
HH
TBB,
Regardless of results this year, the ex gratia payment moves the goal posts, no ?
In effect we could fail on every level this year and the committee could still give PL the same bonus as this year.
Geordie you are quite correct. I let my love for the club get in the way of good old common sense.
You live and you learn.
BRTH
I was about to post about the ‘humour bypass’ that has occurred in recent years.