Chairman's pay to be slashed at Newcastle Utd
Saturday 08 February 1997
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.
- 1 Forget 'The Dress': Here are five of the biggest news stories you might have missed
- 2 The black and blue dress: Makers considering a white and gold version
- 3 PornHub turns masturbation into energy in bid to save the planet
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
British are sexually uptight, dirty and drink too much – according to Spanish book
PornHub turns masturbation into energy in bid to save the planet
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
Saudi Muslim cleric claims the Earth is 'stationary' and the sun rotates around it
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...