Devro chairman receives 200,000 pounds flotation bonus: Payout follows compensation to unsuccessful job candidate

Click to follow
The Independent Online
LEON ALLEN, the non-executive chairman of the sausage skin maker Devro, is to receive a pounds 200,000 bonus for presiding over the flotation of his company on the Stock Exchange.

The bonus comes a week after Devro disclosed a pounds 390,000 compensation payment to David Fyfe, an external candidate interviewed for the position of chief executive, which falls vacant after the float when Frank De Angeli retires. Prospective institutional shareholders pressed the Devro board to choose an internal candidate. Dr Fyfe was compensated without having worked for the company.

Mr Allen's bonus comes on top of a pounds 50,000 annual stipend he will receive this year. His salary was increased from pounds 14,000 in 1992 as he took on the responsibilities of chairmanship.

Also disclosed in the pathfinder prospectus for the flotation, published yesterday, is a pounds 132,000 compensation payment to Guy Lee, a director of Devro until April this year. Mr Allen said the departure was by mutual agreement but he refused to discuss the circumstances.

Mr Allen was chairman when the company agreed to hire Dr Fyfe. However, he said it would be inappropriate to surrender any part of his pounds 200,000 bonus in the light of Dr Fyfe's pay-off.

Payments to all directors - excluding Mr Allen's bonus and the compensation settlements with Dr Fyfe and Mr Lee - will rise by 20 per cent this year. Total remuneration will be pounds 522,000 for the four executive directors and two non-executive directors compared with pounds 433,000 in 1992.

Devro said its market capitalisation after the float would put it among the top 350 quoted UK companies. That indicates a market capitalisation of pounds 200m. It hopes to raise pounds 80m from the flotation, so will be selling about 40 per cent of the company. Some 65 per cent of the shares available will be placed with institutions and 35 per cent will be offered to the public.

The likely market value will be double the pounds 108m management paid for the business in May 1991.

Proceeds of the issue will be used to reduce borrowings and repay preference shares. Debt will be reduced to pounds 17.6m, a 50 per cent gearing level.

(Photograph omitted)