A relatively unknown fund manager has been revealed as the Prudential's mystery £17.5m-a-year man.
The insurer's revelation that it paid an unidentified employee £17.5m last year – more than 600 times the average UK wage and almost double the £8.7m collected by his boss, chief executive Tidjane Thiam – sent City gossips into overdrive.
The mystery man, whose payday makes him one of the best paid workers in the City, has been named as Richard Woolnough, the insurer's leading bond fund manager, who runs funds with more than £28bn under management.
Woolnough runs the M&G Optimal Income Fund, which manages £18bn of clients' cash, and M&G Corporate Bond and M&G Strategic Corporate Bond, which both manage more than £5bn of investments. He is also a co-manager of M&G European Corporate Bond, which runs another £2bn.
His bumper payday, which was six times Wednesday's National Lottery jackpot, was disclosed in the Pru's annual report on Tuesday. The Pru, which is listed in London and Hong Kong, is required by Hong Kong rules to reveal its top five earners alongside the pay packets of its directors.
The company was not required to name Woolnough or another anonymous employee who was paid £7.6m. The Pru refused to officially confirm that Woolnough was the £17.5m-a-year name, but well placed sources said that he was. He was first named by Sky News.
Most of the controversy surrounding City pay has focused on bankers, rather than fund managers, whose pay arrangements rarely make it into the public domain. It is fund managers such as Woolnough's employer M&G which business secretary Vince Cable is relying on to keep a lid on inflated executive pay. There are few rules requiring disclosure of fund managers pay unless they sit on a main board of directors. Cable may now face pressure to introduce new rules.
Woolnough's bumper payday follows the strong performance of his funds compared to rivals. The Optimal Income Fund made returns of 6.6% over the past year compared to the 3.4% average for UK bond funds, according to Trustnet.
Woolnough, who once listed his heroes as Mohammed Ali and Winston Churchill, has previously admitted that: "In order to take risk I need to be paid a substantial amount to take it."
In 2011 he told the Daily Telegraph: "If you offer me a small amount of money to take a risk I will pass the opportunity." A keen runner and cyclist in his 50th year, he described bond managers as "walking along a pavement avoiding the cracks (while) equity managers lie in the gutter looking at the stars".
He said the responsibility of managing billions of pounds of other people's savings doesn't keep him up at night. "Obviously there is a responsibility to the investors because you have more clients, but that doesn't really change whether you're managing £100m or £1bn," he told FT Adviser. "The responsibility doesn't worry me."
Woolnough, who was born in Chesterfield in 1964, describes his job as "somewhere between an intellectual challenge and a game" trying to figure out what's going to happen next in the global economy before anyone else.
He says exciting is "probably the wrong word" to describe his day-to-day office routine. "It's interesting. You're always learning and the longer you work, you realise we've been through it all before. Crises just make you cope better with the next crash. You know how to react."
