Carillion's collapse raises questions over weak corporate governance
The Insolvency Service has ceased payments to Carillion executives, but questions are still raised over the strength of corporate governance at the collapsed construction and facilities management firm.
How much were former executives actually earning in the lead up to Carillion's collapse?
Former chief executive Richard Howson, who headed the company from 2012 until July 2017, pocketed £1.5 million in 2016, which included a £122,612 cash bonus and £231,000 in pension contributions.
As part of his departure deal, Carillion had agreed to continue paying him a £660,000 salary and £28,000 in benefits until October 2018.
A similar deal was struck for former finance chief Zafar Khan who left Carillion in September but was set to receive £425,000 in base salary for the following 12 months.
Interim chief executive Keith Cochrane was in line to be paid his £750,000 salary until July.
Why were former executives still being paid after they left Carillion?
It is quite common for executives to be granted a lengthy notice period, with the UK Corporate Governance Code stipulating they should be "set at one year or less," though new directors can be offered longer periods at the start of their term.
Leaving the company within a shorter time frame is likely to have triggered severance pay stipulated in each of their individual employment contracts.
What is the 'clawback' clause and why does it matter?
Carillion introduced the "clawback" provision as part of its pay policy in 2014 that would allow the company to demand executives return cash and share bonuses for up to two years after payment - a move it said brought the business in line with the updated UK Corporate Governance Code.
However, those terms seem to have been relaxed by 2016 when Carillion's remuneration committee added stipulations that the clawback provision could only be triggered if the firm's results were mis-stated or the executive was "guilty of gross misconduct".
Even then, that provision would only affect the bonuses awarded for the year when the misconduct or misstatement took place.
Questions have been raised as to whether this change was peddled to shareholders as a housekeeping exercise but actually had wider reaching consequences.
Roger Barker, head of corporate governance at the Institute of Directors, said: "The relaxation of clawback conditions for executive bonuses in 2016 appears in retrospect to be highly inappropriate.
"It does no good to the reputation of UK business when top managers appear to benefit in spite of the collapse of the organisations that they are responsible for."
What action has been taken?
Bonus payments to Carillion directors have ceased since the company collapsed on Monday, according to the Insolvency Service which is involved in the company's liquidation.
A spokesman for the Insolvency Service said: "Any bonus payment to directors, beyond the liquidation date, have been stopped and this includes the severance payments which were being paid to some senior executives who left the company."
Prime Minister Theresa May has also said the Official Receiver has powers to recover any "unlawful or unjustified" payments made to Carillion executives.
The investigation by the Official Receiver into the firm will be looking at the conduct of both current and previous directors, Mrs May said.
Who should have caught Carillion's problems?
The jury is still out on who is ultimately to blame but questions will be asked of the company's auditors KPMG, its board and chairman as well as the UK Government.
KPMG, which signed off its 2016 accounts, has looked into 58 contracts over late payment but failed to publicly flag up any warnings signs.
Last year, the Financial Conduct Authority (FCA) opened an investigation into the "timeliness and content" of announcements made between December 7 2016 and July 10 2017 - covering a period of turmoil for the HS2 contractor, in which the firm's share price plunged and its chief executive departed following its profit warnings.
It is expected the Official Receiver's investigation will help determine responsibility for the collapse.