1m pounds a year Ronson rides back to rescue of Heron

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The Independent Online
GERALD RONSON, the disgraced entrepreneur who was jailed for his part in the Guinness scandal, is being offered a contract of pounds 1m a year to stay on as chief executive of his stricken Heron business empire for the next five years.

Creditors owed a total of pounds 1.4bn were yesterday appalled to learn of the details of Mr Ronson's remuneration, part of a rescue package put together to save Heron from receivership.

There was also some concern over the disclosure that Heron paid a 'bonus' to Mr Ronson of pounds 1,770,000 in March 1992 to help to pay his fine of pounds 5m, imposed after his conviction. The company said it recouped the sum by cutting its contributions to Mr Ronson's pension.

'This is outrageous. Who needs this?' said Gary Klesch, a financier who represents a number of Heron's creditors. 'We were perhaps entitled to expect some humility, perhaps a half a million pound package. But this is over the top. He even gets a car and driver.'

Mr Klesch admitted, however, that the rescue deal including the pay package was likely to be approved by Heron's creditors at a series of meetings starting at the end of June. Heron's bankers, owed nearly pounds 1bn, have already backed the deal. The banks have decided that Mr Ronson, who built Heron into the country's second largest private company, must be kept on to run the business even though they privately acknowledge that he bears much of the blame for the present crisis.

Apart from upsetting creditors, Mr Ronson's pay package is also in contravention of the City's new squeaky-clean guidelines as outlined by Sir Adrian Cadbury. The Cadbury report on corporate governance recommended last year that executive contracts should last a maximum of three years, compared with Mr Ronson's proposed five- year deal.

Mr Ronson, who served six months of a 12-month jail sentence for helping Guinness in its controversial takeover of Distillers, will receive a basic salary of pounds 500,000 and the rest in pension entitlements and other perks.