Engineering quartet set to share £100m bonus payout
Four executives are in line to pocket the lion's share of a £100m paper fortune from a lucrative incentive plan after turning round a string of unloved industrial assets.
The quartet head Melrose, an engineering group which makes everything from steel ropes to power generation equipment and lifting gear. A five-year bonus scheme that runs until the end of May is on track to give them a giant payout which will be split with five other senior employees.
Despite the political debate over giant boardroom pay deals, the FTSE 250 group has been an investors' favourite. Its shares have risen by three-quarters since the incentive plan began, giving it a stock market value of £1.5bn. Annual profits on Wednesday are expected to show further progress, with analysts pencilling in a 22 per cent rise in underlying operating profit to £180m.
Melrose's four executive directors – Christopher Miller, left, David Roper, Simon Peckham and Geoff Martin – set up the firm as a cash shell nine years ago to acquire struggling businesses, turn them around and sell them on.
Last summer it disposed of Dynacast, an alloy maker, for £377m – a healthy profit. Since 2003, Melrose claims to have delivered an increase in equity value of more than £1 bn. The company specialises in stripping out costs from assets and improving sales. The team benefited from a similar venture, Wassall, a decade ago.
The size of the bonus pot, which will be distributed in the form of shares, is unlikely to be disclosed until next month when Melrose issues its annual report. Last year, it was valued at £71m, with £62m of that to be split between the four directors.
Despite the impending riches, the team shows no signs of slowing down. Melrose is seeking more takeovers after being defeated last year in its pursuit of Charter International, the maker of industrial fans that traced its roots back to Cecil Rhodes, the founder of diamond miner De Beers.
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