Chairman's pay to be slashed at Newcastle Utd

Sir John Hall, chairman of Newcastle United, and his two fellow directors will see their pay slashed when the Premier League club floats on the stock market around Easter.

The club's annual statement of accounts sent to shareholders this week showed that Sir John, his son, Douglas, and Freddy Shepherd, another big shareholder, collectively earned pounds 2.45m last year - almost pounds 1m more than star striker and world-record signing Alan Shearer is said to be on.

But it emerged yesterday that Sir John, who is standing down from the board of the holding company at flotation, will not draw a salary after receiving pounds 836,302 last year.

The two other board members will receive pay packets worth between pounds 40,000- pounds 50,000 for performing their duties as non-executive directors in the quoted company. Last year Douglas Hall and Mr Shepherd were paid more than pounds 745,000 each.

The size of the directors' wage bill - and the state of the debt-laden balance sheet - has raised eyebrows among investors as they ponder Newcastle's proposed pounds 180m flotation.

One leading football analyst noted that even the reduced salaries of the two non-executives were large compared to those paid at Aston Villa, which this week announced plans for a pounds 120m-pounds 140m stock market listing.

"It's nice money if you can get it," he said. "But if you look at Villa's accounts, three non-executives earn between pounds 5,000-pounds 10,000. That's more like the going rate."

The huge boardroom salaries paid to the Newcastle board last year were defended by NatWest, brokers and financial advisers to the issue. "The management team did not draw a salary for four and a half years," explained Paul Deakin of NatWest Markets corporate finance arm. "It was always the intention to pay them that amount but it should have been put in a contractual agreement and spread over the period."

Sir John, who will remain chairman of the football club after flotation, has never had a service contract with Newcastle since he took control of the club in 1992. Family companies owned by Sir John and Mr Shepherd own about 90 per cent of the club. Their stake is likely to be reduced to around 70 per cent after flotation as neither Sir John nor Mr Shepherd is selling any shares. They are also set to receive dividends that could make up for the salary cut.

Newcastle hopes to clear debts of pounds 30m by raising up to pounds 50m from the float. In the year to 31 July the club made an operating profit of pounds 5.9m on sales of pounds 28.9m but reported a loss after transfer fees of pounds 23.2m.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk