The Institute of Chartered Accountants in England and Wales (ICAEW) is facing intense scrutiny over a confidential severance package granted to its retiring CEO, Michael Izza.
Sky News has reported Izza will receive a substantial sum of money upon his departure at the end of the year.
While rumors suggest the payment could be as much as twice his annual base salary of £492,000, a source close to the organization claims the accurate figure is closer to £250,000.
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The ICAEW has declined to disclose the precise amount, stating it will be revealed in the next annual report.
The decision to award such a significant sum to Izza has drawn attention because his departure was initially portrayed as his retirement from the accountancy profession three months ago.
The lack of transparency in not publicly disclosing the payoff raises concerns among ICAEW stakeholders.
It is also speculated that there may be additional benefits included in his exit package beyond the reported figure.
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This financial controversy adds to the ICAEW’s existing troubles, as it has been criticized for retaining fines imposed on major auditors instead of redistributing them to affected parties who have suffered due to corporate governance failures.
For instance, when Silentnight, a mattress retailer, collapsed, the ICAEW kept a £13.5 million penalty rather than using the funds to compensate pensioners who suffered losses.
Last year, in response to criticism, Izza said financial penalties imposed on ICAEW members were not intended to serve as compensation for third parties affected by their actions.
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However, a study by Sheffield University accused the ICAEW of lacking transparency and being involved in an obvious conflict of interest.
The ICAEW has not provided a statement regarding the terms of Izza’s departure as promised.
The organization simply stated that his departure is in compliance with his employment contract.
Julia Penny, the ICAEW president, praised Izza’s leadership and achievements during his 21 years of service when announcing his retirement.
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The search for Izza’s successor is currently underway, but the controversy surrounding his severance package and the ICAEW’s handling of fines continues to raise concerns about transparency and accountability within the organization.
