IT founders hand £15m windfall to staff

Click to follow
The Independent Online

Three technology entrepreneurs have handed over 10 per cent of the company they founded to staff in a move that could produce a £15m windfall for about 10 employees.

Mark Hunter, Donald Kirkwood and Paul Manweiler, who founded the Axon IT consultancy business 10 years ago, have each given up 27.5 per cent of their own personal shareholdings in the company to a staff incentive scheme. This amounts to about 10 per cent of Axon's market capitalisation and is now worth about £11m.

Axon's top performing executives, about 10 people, have been given options to the scheme. If Axon's share price gains 150 per cent from its current value in three years, the options can be exercised. This would make the executives' options worth £15m. Mr Hunter said: "This is not a selfless move. It is designed to benefit everyone. We have 10 years of profitable growth behind us. Now we are ready for the next phase of growth and we need to show the up and coming management team that exceptional performance will deliver exceptional rewards to the leaders that take us there.

"If the shares go up to above 500p, then we will have created value for shareholders. These options give value to the people who helped achieve it. Shareholders get the uplift, so do the founders, and everyone else is rewarded too."

Axon floated in 1999 at the height of the dot.com boom. Its shares soared to highs of £22.87, giving the company a market capitalisation of more than £1bn and making Mr Hunter's 22 per cent share in the business worth £260m. After hitting a low of 41p a share in 2002, the shares have climbed back, closing yesterday at 211p, giving Axon a market capitalisation of £110m.

Mr Hunter's shareholding will go down to about 16 per cent after giving up the shares to the scheme, making it worth about £17.6m. Mr Kirkwood's share drops from nearly 7 per cent to about 5 per cent and Mr Manweiler's will fall to about 1 per cent.

The incentive scheme was announced as Axon reported an increase in annual turnover of 20 per cent to £60m and a leap in pre-tax profits of 58 per cent to £6.3m. It also announced it had won a £16.5m contract with Manchester City Council.

Separately Axon is buying back up to 5 per cent of its shares for an employee benefits trust to reward a larger group of staff for the success of the company's shares.

Comments