The company caused outrage last year when it emerged that senior directors, led by the chairman, David Jefferies, were in line for dividends of almost pounds 500,000 linked to the flotation of the Grid on top of big salary increases.
The company refused yesterday to spell out the terms of the incentive scheme or the performance targets that would have to be met as it announed a 1 per cent increase in pre-tax profits to pounds 616m for the year to 31 March. Shareholders will be presented with the details at the annual meeting on 26 July by Malcolm Williamson of Standard Chartered bank, the non-executive who chairs the Grid's remuneration committee. The other two members are Bob Fairclough, former chief operating officer of BTR, and Trevor Robinson, a senior consultant with the Republic National Bank of New York.
In the flotation prospectus, the Grid said consideration would be given to performance-linked incentive plans, which would encourage executive directors to acquire and hold shares for a "significant period".
The document also stated that the policy would be to set remuneration packages in line with market practice for generation and distribution businesses and around what the lowest quarter of similar-sized industrial groups paid their executives.
Under the present pay scheme, the Grid's executive directors are eligible for bonuses of up to 37 per cent of their basic salaries. In 1994/5 the chief executive, David Jones, received pounds 237,000 including a bonus of pounds 49,000 while the finance director John Uttley earned pounds 196,000 including a bonus of pounds 38,000. Roger Urwin, managing director of the Grid's transmission business, joined in November 1995 on a salary of pounds 170,000.
Operating profits last year from continuing operations were 9 per cent higher at pounds 656m and Mr Jones said that "uplift" payments - the extra amount the Grid pays generators to ensure supply and demand are kept exactly in balance - had been cut by a further pounds 122m.
In the last two years uplift payments have been reduced by pounds 200m, which is worth about pounds 10 off bills for the country's 22 million domestic customers.
Mr Jones confirmed that the Grid was involved in discussions with several parties about selling a stake in its telecommunication business, Energis.Reuse content