Compass and Imps chiefs join £2m club

Two chief executives stormed into the exclusive £2m-a-year club yesterday with the publication of annual reports from the contract caterer Compass and the cigarette maker Imperial Tobacco.

Mike Bailey, the chief executive of Compass, which owns the Harry Ramsden fish and chips business, runs the BBC canteen and operates Marks & Spencer's Simply Food shops on railway stations, saw his pay reach £2.62m in the 12 months to 30 September.

This makes him one of the UK's best paid company bosses, behind only the likes of Sir Terry Leahy, the chief executive of Tesco, whose last disclosed pay packet was £2.83m.

Selling more cigarettes meant Gareth Davis, the chief executive of Imperial Tobacco, earned £2.15m in 2003, up from £1.6m the year before, a 34 per cent rise in pay.

However, the company also revealed that Manfred Haussler, its former sales and marketing director who stood down from the board last summer, was paid £593,000 and would continue to get £298,000 a year even though he had relinquished his day-to-day responsibilities.

Mr Haussler stood down from the board after German authorities launched an investigation into alleged price fixing and raided on the offices of Reemtsma, the European cigarette group which Imperial acquired in May 2002.

Mr Haussler continues as an employee of Imperial, as do several other employees involved in the investigation. No one has been charged as a result of the investigation, which Imperial said could go on for several years.

Mr Bailey's salary at Compass was boosted by a £1.6m bonus payment. He was awarded the cash in recognition of the company's 6 per cent rise in turnover, a 10 per cent increase in operating profit and a 0.4 per cent growth in return on capital. The company also generated free cash flow of £405m.