The boss of Hargreaves Lansdown and his senior team have waived their annual bonuses after about a quarter of the company’s customers were affected by the suspension of Neil Woodford’s flagship investment fund.
Chris Hill, Hargreaves’ chief executive, had previously said he would not take his bonus until Woodford’s equity income fund reopens. Hill has now decided to waive the payout, which was £1.7m last year.
Hargreaves’ chief financial officer, Philip Johnson, whose bonus was £997,000 last year, will receive no bonus for 2019, along with Mark Dampier, the research director, and Lee Gardhouse, the chief investment officer, whose pay is not disclosed.
A source at the investment group said: “Chris believes this is the right thing to do. He recognises the impact that the gating [of the Woodford fund] has had on our clients. This demonstrates his and Hargreaves Lansdown’s continued focus on putting clients first.”
Hargreaves has been under pressure for continuing to recommend Woodford’s equity income fund until he blocked withdrawals on 3 June. The suspension of the former star stock-picker’s fund affected more than 290,000 Hargreaves customers, about a quarter of its investors, whose savings are likely to be trapped for six months.
Hill issued an apology to his customers a few days after the fund’s suspension and has waived Hargreaves’s fees for those affected. He has also urged Woodford to stop taking fees from the fund’s investors, although Woodford has refused to do so.
Hargreaves is likely to face questions about the impact of the Woodford affair on its business and reputation when it reports its annual results on Thursday. Hill has answered written questions from the Treasury committee but these concentrated on his company’s dealings with Woodford and how it decides which funds to recommend.
Woodford blocked withdrawals from the equity income fund after becoming overwhelmed by customer withdrawals after a series of bad market bets. The value of the fund has fallen from more than £10bn at its peak to £3.5bn because of withdrawals and poor performance.
