Nat Power chief gets performance-unrelated bonus

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The Independent Online
The chief executive of National Power, Keith Henry, received a "personal bonus" of pounds 65,000 last year which was negotiated at the time he joined the company and completely unconnected to its performance, it emerged yesterday.

The one-off bonus was in addition to a pounds 100,000 golden hello paid to Mr Henry on joining and took his total package, including pension costs, last year to pounds 782,555.

National Power's report and accounts also show that pounds 338,000 was paid to another director, Graham Hadley, who left the company last December while a further pounds 461,000 in free shares was paid to the chairman John Baker and two other executives under a long-term incentive scheme.

In addition to a basic salary of pounds 325,000, Mr Henry received a bonus of pounds 110,500 and pounds 12,855 in taxable benefits, taking his remuneration to pounds 448,355. His total emoluments were further increased by pension costs of pounds 334,200.

However, less than half the pounds 110,500 bonus was related to National Power's performance. The remainder - worth 20 per cent of basic salary - was negotiated at the time of Mr Henry's recruitment from the international contracting group Brown & Root.

Sir John Banham, chairman of the remuneration committee, said that the short- and long-term bonus schemes had been constructed so that they would typically pay out 50 per cent on top of base salary.

The maximum annual bonus has been set at 40 per cent of salary, while executive directors are eligible for shares worth up to one-third of salary under a performance share plan introduced in 1993. The first awards were made last month under the long-term scheme and resulted in Mr Baker receiving 40,347 shares worth pounds 217,470.

Two other executives - Brian Birkenhead, the finance director, and the technology director Rod Jackson were granted shares worth pounds 141,272 and pounds 102,760 respectively.

Mr Henry was also granted 82,589 share options during the year at pounds 4.48 while Mr Baker exercised 139,534 existing options, realising a paper profit of pounds 368,369.

PowerGen yesterday confirmed it is proceeding with the pounds 450m sale of two power stations to the Hanson-owned Eastern Group. The generator had threatened to withdraw after its takeover of Midlands Electricity was blocked by the Government. Eastern's purchase of the High Marnham and Drakelow stations will increase its generating market share to 9 per cent.