The chief executive of Britain’s largest fund shop Hargreaves Lansdown has pocketed £2.1m in bonuses despite promising not to take incentives until customers in the former Woodford Equity Income fund were able to access their cash.
Hargreaves was criticised for continue to recommend the disgraced manager’s fund, via its prestigious Wealth 50 list, right up until the investors’ money was trapped in June 2019.
At the time, chief executive of Hargreaves Chris Hill said: “Until investors are able to access their money held with Woodford Equity Income, I will not be taking a bonus.”
However, he was paid £2.1m in bonuses this year split between upfront cash and deferred shares. Investors are still unable to access all of their savings trapped inside the the Woodford fund.
Chief financial officer Philip Johnson received almost £1.5m through a combination of shares and cash while Lee Gardhouse, chief investment officer, was paid a share bonus of £50,933.
Mr Woodford was removed from running his f;agship fund in October and the portfolio’s administrator Link decided to close it and return the money to investors. This fund initially closed because Mr Woodford was unable to meet the demand for cash from departing investors, due to a large weighting in hard-to-sell private companies.
However, only £2.4bn has been paid back to investors who are waiting for an estimated £285m holding in unlisted stocks to be sold and returned to them. When the fund closed, it had more than £3.6bn in assets and investors have already potentially lost 25pc of their savings.
Stuart Ward, whose name has been changed, said he was “livid” after investing £20,000 in the Woodford fund via Hargreaves Lansdown.
“It just goes to show that there is plenty of money sloshing around to pay compensation to investors who have lost millions,” he said.
Lawyers are preparing legal action against both Hargreaves and Link. Kamran Vojdani of Leigh Day, one of the firms mounting a claim, said: “We expect that this information will be the source of upset to investors in the Woodford Equity Income Fund.
“Many who worked their whole lives lost significant elements of their pension income from investing in the fund, including those that relied on Hargreaves keeping the fund on its Wealth 50 and those that gave the firm complete discretion over their investments through the Hargreaves funds. Clearly, these people will be very upset.”