Golden handcuffs for Grand Met director

Click to follow
The Independent Online

Grand Metropolitan, the food and drinks group which has developed a reputation for richly rewarding its directors, has issued a "golden handcuffs" contract to its latest boardroom appointment.

Paul Walsh, an American who looks after the group's Pillsbury business in the US and who was appointed to the main Grand Met board in October, will be a paid a lump sum of $750,000 plus interest if he is still in the company's employment in seven years. This is in addition to his $910,000 annual salary.

The company said: "Basically it is golden handcuffs with a non-compete and gagging clause. He is running one of the best US food companies and we need to keep up with rival levels of compensation."

Under the terms Mr Walsh qualifies for the payment as long as he undertakes not to join a competing food group within 18 months or divulge details of the company's operations within that time.

He does not receive the payment if he leaves the company within seven years.

Details of the "seven-year itch" scheme follow a year during which Grand Met has paid compensation payments totalling pounds 1.3m to two directors who left the company. Ian Martin, who left the company to become chairman of Unigate, was paid pounds 557,458.

David Nash was paid pounds 790,000, the company confirmed yesterday, when he lost out to John McGrath in the battle for the position of chief executive.

At the other end of the pay scale, the company last month paid pounds 106,000 in compenstion to 900 of its Burger King staff who were told to clock off on unpaid breaks whenever the outlets were quiet.

Meanwhile, Scantronic, the security alarms firm, revealed yesterday a pounds 780,000 payout to former chief executive Chris Brookes hit profits. The payout followed Scantronic's takeover last November by Menvier Swain.

Together with the cost of closing Scantronics's headquarters, the pay- off has caused a pounds 1m exceptional charge that will wipe out any profits made in the second half to April.

Mr Brookes had been on a five-year contract until Scantronic's board negotiated it down to three years shortly before the pounds 10.5m takeover.

He was on a salary of pounds 210,000 plus pension contributions at 15 per cent of salary, at a time when Scantronic had fallen heavily into loss.

Menvier said it will also be writing down the value of Scantronic stock on its balance sheet by pounds 4m in the second half.

Mr Brookes' payout was not the only one to hit Menvier Swain.

Just before Christmas the firm also paid a sum believed to be pounds 250,000 to settle a lawsuit with the former finance director Ray Dias.

Mr Dias left the company after pressure from institutions when Scantronic hit trading problems amid mounting debt in July 1994.