Big wins on share options

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The Independent Online
Directors of Manweb and thousands of employees stand to make millions of pounds by cashing in share options in the event of a successful takeover, writes Mary Fagan.

Scottish Power said that pounds 20m to cover the cost of options was included in the bid price, of which most would go to staff with options under the company's savings-related scheme. The option price in the employee scheme is 175p compared with the cash alternative of 915p.

Executive directors would make more than pounds 800,000 from exercising options at the level of the cash offer. Taken with their existing beneficial shareholdings in the company, the total gain could be about pounds 2m.

John Roberts, chief executive, would make a profit in excess of pounds 140,000 from exercising options in addition to the pounds 143,000 he made from options last year. Howard Kirkham, director for the distribution business, would be the biggest winner, with a potential gain of about pounds 370,000 on the basis of the cash price.

David Vernon-Smith, director for corporate affairs, retains substantial options under the executive scheme that could net him about pounds 190,000.

He also has more than 3,000 options under the company's Savings Related Share Option Scheme.

Manweb's directors also stand to gain from the termination of their two- year rolling contracts should the bid succeed. But the benefit is tempered by the company's recent decision to switch from three to two years.

Mr Roberts was the highest-paid director at the group last year with a basic salary of pounds 165,000 and a total package of pounds 211,163, down from pounds 240,500 the previous year. The difference was attributable mainly to a drop in the performance-related bonus from pounds 56,000 in 1994 to pounds 33,000.