Terra Firma’s Hands Cuts Dividend as Employee Pay Rises

Terra Firma Capital Partners Ltd. founder Guy Hands cut his dividend to 3 million pounds ($4.9 million) while boosting compensation for the private-equity firm’s employees.

The Guernsey, Channel Islands-based firm paid a dividend for the year through March 2013 from its London entity to another company owned by Hands, 54, according to filings at the U.K.’s Companies House. In the previous year, the dividend was 3.5 million pounds.

The costs for wages, pensions and social security for all employees including directors was 40.9 million pounds, up from 20.4 million pounds, as the firm boosted its staff to 91 from 84. The increase in pay was partly due to Terra Firma completing acquisitions including U.K. nursing home operator Four Seasons HealthCare Ltd. and the Garden Centre Group Ltd.

The highest-paid director received 2.7 million pounds, up from 761,000 pounds, the filings show. That person was CEO Tim Pryce, said a person with knowledge of the matter, who asked not to be identified because the information is private.

Private-equity firms typically structure funds to last a decade, with an investment period of five years, receiving 20 percent of the profits from investments above an agreed threshold. Hands moved permanently to Guernsey in 2009 to reduce what he called his “tax burden.”

A spokesman for Terra Firma declined to comment. Pryce didn’t immediately respond to calls seeking comment.

To contact the reporter on this story: Kiel Porter in London at kporter17@bloomberg.net

To contact the editor responsible for this story: Simone Meier at smeier@bloomberg.net

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