BAE warns on risk of Scottish independence

Suzie Neuwirth
DEFENCE giant BAE Systems yesterday became the latest FTSE 100-listed firm to speak out against the risks of Scottish independence.

“BAE Systems has significant interests and employees in Scotland, and it is clear that continued union offers greater certainty and stability for our business,” it said in its annual report.

“In the event that Scotland voted to become independent, we would need to discuss the way forward with the Ministry of Defence and UK government, and work with them to deliver the best solution in those circumstances.”

BAE employs around 35,000 people across the UK.

Lloyds Banking Group and oil giant Shell recently expressed concerns about what would happen in the case of a yes vote at September’s referendum. Last month, insurer Standard Life warned that it may relocate its operations to England.

BAE’s outgoing chairman Sir Richard Olver took home £740,000 in 2013, broadly flat from the previous year, according to the annual report.

While chief executive Ian King was paid £2.5m, slightly down from £2.57m in 2012.

Jerry DeMuro was hired to succeed Linda Hudson as president and chief executive officer of the BAE group from 1 February 2014.

His salary on appointment was $950,000, with a maximum bonus opportunity of 225 per cent of salary.

BAE Systems has suffered in the face of squeezed defence budgets in the US, its largest market, and in its home market of the UK.

“In a challenging climate for defence spending, the executive will continue to focus on disciplined cost management in those markets that are contracting and increased sales endeavours in those parts of the world where new business opportunities are both appropriate and available,” said new chairman Sir Roger Carr, who joined on 1 February.

Shares closed 0.9 per cent lower.