Burton still paying former executives (CORRECTED)

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The Independent Online
CORRECTION (PUBLISHED 23 MAY 1993) APPENDED TO THIS ARTICLE

THE Burton retailing group is being forced to pay out hundreds of thousands of pounds a year to former executives - many of whom left the company long ago - under a deferred bonus scheme set up by Sir Ralph Halpern in the 1980s.

Some pounds 250,000 in bonuses is to be paid later this year to Sir Ralph and Lawrence Cooklin, his successor as chief executive. A source said that 'tens' of other former executives, many below board level, were also gaining from the scheme, years after they resigned or were fired.

Sir Ralph resigned as chairman and chief executive in November 1990, and Mr Cooklin departed over a year ago. Both received generous pay-offs - Mr Cooklin was paid pounds 773,000 after being chief executive for just 15 months, while Sir Ralph received pounds 2m and a pounds 456,000 pension for life.

This year's payments are part of a generous executive remuneration scheme put in place when Sir Ralph was in charge.

The scheme, which was originally geared to earnings per share growth, is believed to be related to changes in the company's share price. This means that former executives have been gaining from the recovery in the group's fortunes under John Hoerner, the American chief executive - despite no longer being in a position to influence the group's performance.

Burton is understood to have taken legal advice on the validity of the contracts, but has been told that they are watertight. It is understood that the payments being made this year will be the last under this particular scheme. Coming at a time when the company is attempting to push through a massive redundancy programme, public disclosure of the payments will come as an acute embarrassment to Mr Hoerner.

They have also caused outrage in the City. 'These are the people responsible for the unholy mess Burton got itself into and they are still having their pockets lined by the company,' said one shareholder.

Burton believes it has little option but to make the payments. 'These are hangovers from the Burton that was, not the Burton as it is now,' said a senior executive.

Sir Ralph has recently reappeared in retailing after a period in the fashion world. He is heading a group that has bought Digsa, the Spanish food retailer, from Ashley.

Mr Cooklin is working as a consultant. When contacted for a comment, he said: 'I do not speak to strangers on the telephone.'

Excessive pay, pages 4 and 5

CORRECTION

SIR Ralph Halpern has asked us to make clear that any money paid to him at the end of this year will form part of a severance package worth up to pounds 2m plus an annual pounds 456,000 pension agreed when he left Burton, and which was notified fully to shareholders at that time. Any impression given by our article on 2 May that he was to receive further amounts was incorrect. Sir Ralph has been invited to advise, and is not heading, Digsa, the Spanish food retailer. We apologise for any embarrassment.

(Photograph omitted)

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