Fresh row over bonus payments to ITV chiefs

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The Independent Online

The Carlton Communications share option plan, which paid out a full £13.2m entitlement to its former chairman Michael Green, is under fresh scrutiny after it emerged that a previously undisclosed group of senior employees were also members of the scheme.

The Carlton Communications share option plan, which paid out a full £13.2m entitlement to its former chairman Michael Green, is under fresh scrutiny after it emerged that a previously undisclosed group of senior employees were also members of the scheme.

ITV shareholders are now demanding to know on what basis these payouts were calculated and whether they were made in full or reduced.

There was uproar among investors earlier this month at the size of Mr Green's payout, which was triggered by the merger of Granada and Carlton to form ITV.

After a shareholder rebellion last year, Mr Green was forced to quit the company before he could step up to become the new ITV chairman.

Other Carlton directors who received their full entitlement under the company's equity participation plan were Paul Murray, the ex-finance director, who got £7.3m, and David Abdoo, the company secretary, who received £5m. Including a £1.8m cash payment to Mr Green, the total "golden goodbye" payments to the three were £27m, equivalent to a third of the annual cost savings that the merger was designed to produce.

At the time, Sir Brian Pitman, the Carlton non-executive who chaired the company's remuneration committee, insisted to angry shareholders there was no discretion he could apply to the payouts to the Carlton board directors, Mr Green, Mr Murray and also Mr Abdoo.

However, it has now emerged that a group of senior executives within Carlton were also members of the same equity participation plan. These included Rupert Dilnott Cooper, Clive Jones and Mike Green (no relation). Decisions over their payments were made by Mr Green and Mr Murray.

Mr Murray refused to comment, insisting it was now a matter for ITV. Mr Green did not return several calls on the matter made by The Independent last week.

How all the payouts were calculated and what differences there might have been in the calculations are important matters to those shareholders angered by what they saw as excessive payouts to the three Carlton directors under the share option scheme, which started in 2001.

When the size of the awards emerged, one of the first questions asked was why some of the payments were not made pro-rata instead of in full, reflecting the fact that some of the share awards related to future years.

A source close to the Carlton board said: "The decisions on Michael Green and Paul Murray, who were executive directors of Carlton, were made by the independent non-executive directors. The decisions on the scheme for other members who were not on the board were made by the Carlton executive directors as is common practice."

People close to the situation believe the board directors and the senior executives were all given awards equal to a year's entitlement under the scheme. However, some Carlton executives may have subsequently received only 53 per cent of the full potential payout because they were working on a six months' notice period.

The board directors were allowed a 100 per cent payout because they were deemed to have had a longer notice period, possibly up to two years, taking them up to the time of the Carlton-Granada merger which triggered the full awards under the scheme.

The issue echoes the decision by Carlton to pay Mr Green £1.8m in cash for loss of office even though he did not have a contract with the company.

One leading ITV shareholder said: "Our discussions with the company on a range of issues continue, including this payment."

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