Energy Group bosses could leave with pounds 1m

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The Independent Online
Two senior executives of Energy Group will walk away with cash bonuses and compensation packages worth more than pounds 1m each if they decide not to stay with the company after the proposed pounds 3.7bn takeover by PacifiCorp of the US.

The formal offer document to Energy Group shareholders yesterday showed Derek Bonham, executive chairman since the group's demerger from Hanson earlier this year, would emerge with pounds 1,491,419. John Devaney, chief executive of Eastern, the regional power company, would leave the group pounds 1,159,995 better off.

The document revealed that the normal one-year notice period for executives leaving the group would be extended to two years in the event of a takeover, giving Mr Bonham twice his pounds 450,000 salary as a pay-off.

He will also be entitled to receive a long-term share bonus in cash, worth pounds 443,566, whether or not he stays with the combined group. In addition Mr Bonham will make another pounds 147,853 from Energy Group's controversial Special Addition Bonus Scheme, created at the flotation because of the three-year delay in payouts under the long-term plan. Mr Bonham also owns shares in Energy Group worth pounds 627,000 at PacifiCorp's 690p bid price.

Mr Devaney, 50, will see his pounds 350,000 double to pounds 700,000 if he leaves the company, but will make pounds 459,995 from the two bonus schemes whatever happens. He owns shares worth pounds 34,500 in Energy Group at the offer price. As chief executive of Eastern he received a package worth pounds 1.3m before tax after the 1995 takeover by Hanson.

The offer document said both executives had been invited onto PacifiCorp's board if the deal went through, although detailed terms had not been discussed and both Mr Bonham and Mr Devaney have not yet decided to do so. Mr Devaney has indicated he may leave the company and seek another job outside the utility sector.

Another director to share in the windfalls is Eric Anstee, Energy Group's finance director, who could walk away with a pay-off worth pounds 500,000.