WHEN FirstGroup's annual meeting returns to Aberdeen next week, chief executive Tim O'Toole may be asked to justify his 86 per cent pay rise at a time when shareholders are waiting for the dividend to be reinstated.
He may not be asked - at last year's meeting, most of the questions were about the local bus routes.
This time, US hedge fund Sandell is lurking in the wings with a three per cent stake and a hostile vote against the remuneration report - though the New Yorkers may not appear at the meeting - and several corporate governance groups have joined in. But after thanking shareholders a year ago for bearing the "additional burden" of the company's shock £615m rights issue, Mr O'Toole is in no mood to apologise.
In an exclusive interview on a flying visit to Scotland last week, the 58-year-old American said that after two years of waiving his bonus, to do so again would "not be appropriate" when total shareholder return had now turned positive. The year past was, he said, "an inflection point for the company".
That turn in the road will feel overdue for the man who was handed the keys when Aberdeen's veteran busman Sir Moir Lockhead left the driving cab in late 2010 after 21 years. The road ahead looked clear, but Mr O'Toole, fresh from success at the controls of London Under-ground, little knew that FirstGroup was about to run into serious traffic. The transport giant's shares are still at less than one-third of their value when he took the wheel. Was he expecting such a rough ride?
"No, obviously not. First of all, the recovery plans always assumed the economy would recover a little bit faster than it did. I don't think there was an appreciation when I came in of the fragility of the bus business, which only revealed itself a couple of months into my tenure when they put in a price increase and didn't get any yield."
In other words, the model of ageing buses and constantly rising fares in the later stages of the Lockhead era had run out of road, and there was no quick fix. But meanwhile, the US business on which FirstGroup had blown other people' s money in a £1.9 billion deal at the top of the market had started to blow up.
Mr O'Toole explained: "The cataclysm in the student market was happening as I walked through the door, nobody knew how deep that would be."
Turning round Greyhound, the iconic coach business, has also taken longer than expected, with FirstGroup's board (then chaired by Aberdeen's Martin Gilbert) rejecting the option of selling it off to pay down debt.
Finally, the rail business, which by 2012 had become the group's sole hope of short-term growth, found itself ambushed by Sir Richard Branson, when the Government was persuaded to suspend the entire franchising process, cancel the award of the West Coast franchise to FirstGroup, and allow Sir Richard's Stagecoach-backed Virgin Rail to hang on to it for what is now a three-year extension. FirstGroup found itself accused of over-bidding and over-promising.
Asked to comment on the tycoon's influence, Mr O'Toole said wrily: "I have been suffici-ently traumatised by the West Coast." He goes on: "No one was aggrieved by the interruption more than our company: it hit our confidence and our share-holders in a way that was undeserved."
But he added: "Given the opportunity, we would put the same bid in again. We did not put that in because we thought that was what we had to do to win: we thought we could deliver, and nobody has seen the bid, they don't know how we were going to do that."
Asked about the relaunched process, which has seen First-Group lose out in all three of the franchise awards made in recent weeks, including the Caledonian Sleepers lost to Serco, Mr O'Toole said he was glad the Government had "stuck to a winning formula" and had not abandoned franchising. He also sees little enthusiasm from Labour for any change.
Despite the much-trumpeted success of the publicly-owned East Coast franchise, it has been observed that its growth has been limited to seven per cent against 25 per cent elsewhere, and the financial numbers have had the benefit of old trains (to be renewed in 2018).
But on mutterings in the City that Mr O'Toole has admitted FirstGroup needs "two large and one small" rail awards - which makes the East Coast and ScotRail franchises "must-win" for the group - the chief executive insisted that his remarks referred to a five-year cycle. "We will find our role in this market as it shakes out over time: any one bid is not going to decide anything."
He added: "Shareholders only want us to win bids on sensible terms... FirstGroup has a long history of intelligent bidding. I would expect we will continue to use that approach, in the meantime employing our resources to rebuild our two big bus businesses." Whether that "in the mean-time" implies possible further disappointment will be known when those two prize franchises are awarded in the autumn. Intriguingly, Mr O'Toole added: "I would expect the West Coast to come up again and we will bid for it." But the group's big regional bus businesses, including the one in Glasgow, are on the up.
"We are putting in new buses, which obviously lowers maintenance expenses, gives you a product more attractive to the public, and gives them and employees confid-ence you are in it for the long-run. We are cutting an awful lot of fares and that formula has produced growth in fare-paying passengers for the first time in 10 years."
The Stateside battles were also being slowly won, Mr O'Toole said, with price increases at First Student sticking for the first time in four years, and a modernised Greyhound fleet promising to be "a proposition which can move the dial". Are there any regrets at how the trip has gone so far?
"It has been more of a challenge than I anticipated, but great people, great challenges. It requires more work, but what we are doing is so important because we are affecting the lives of millions of people every single day."