Bob Willott on the bottom line

BOB WILLOTT

Now here's a conundrum, or two conundrums actually.

AKQA's UK accounts, just published, show a big drop in post-tax profits from £1.5 million in 2007 to £281,227 in 2008, but this is attributed to some non-recurring salary costs arising from the acquisition of a controlling interest in the group by private equity house General Atlantic Partners in 2007.    Why profits went down in 2008 as a result of exceptional salary costs relating to 2007 is a little difficult to understand.

Even more perplexing is the difficulty the management has experienced in identifying how much of group directors' remuneration relates to services provided to the UK company.  So it hasn't allocated anything at all.  Apparently the remuneration of the UK company's directors who are also executives of the parent company AKQA Holdings Inc is borne by AKQA Holdings Inc and AKQA says "it is not practicable to allocate this remuneration between their services as directors of AKQA Inc and their services as directors of AKQA Limited"

Not practicable? How can that be? How could these executives have built a technology-based enterprise of world renown without also having the ability to estimate how their remuneration should be allocated between two companies? Chief executive Tom Bedacarré holds a BA degree from Stanford University and an MBA from the Kellogg School of Management.  Chairman Ajaz Ahmed has an honorary doctorate from Oxford Brookes University and is bright enough to have mentored students at Said Business School.

Come along now chaps, you can do better than this.

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