Marconi chiefs pocket £1m-plus pay packages

Click to follow
The Independent Online

Marconi, the bombed-out telecoms company, revealed that the price of paying off its former directors has risen further. It disclosed that Steve Hare took £1.5m when he stepped down as finance director in November.

Mr Hare, who was criticised along with former colleagues Sir Roger Hurn, Lord Simpson and John Mayo over a controversial profits warning at Marconi in June 2001, received £728,000 in severance pay. He also took home a salary of £312,000 plus a £394,000 bonus for eight months' work before stepping down in November.

Marconihas already been embroiled in a row over pay-offs with former directors. Mr Mayo, who used to be its deputy chief executive, reached an out-of-court settlement with his former employer in March after he said the company owed him £1.6m in pension and tax contributions. Marconi's annual report for the year to 31 March 2003, published yesterday, revealed that Mr Mayo received £898,000 of the £1.6m he was claiming. Mr Mayo had already received £2.3m for the three months he worked for the group in 2001, including a £600,000 termination payment.

Marconi's top four executives, at the time of its profits warning, were mentioned in an investigation by the Financial Services Authority but were not individually criticised for the way it was handled.

Marconi refused to comment on the payouts for its former directors. Of its new board, its chief executive, Mike Parton, received £1.3m, including a £696,000 bonus. Mike Donovan, chief operating officer, was paid £1.32m. Both pay packages included bonuses for remaining with the company during its most turbulent year, in which the board had to persuade shareholders to agree to a rescue financing that gave them only 0.5 per cent of the restructured company.

Marconi said it would ask shareholders to vote on a new share consolidation plan at its AGM in a bid to cut back on the £450,000 annual cost of servicing shareholders with tiny holdings. The plan would see shares consolidated on a basis of five for one, with shareholders receiving a new Marconi Corporation share with a nominal value of 25p for every 5 shares they already hold with a nominal value of 5p.

Separately, Stagecoach gave its chief executive Brian Souter a 72 per cent pay rise to £860,000 for stepping into the role from his position as executive chairman of the troubled transport group. The company's annual report showed that Keith Cochrane, ousted from the chief executive's post by Mr Souter, got a £740,000 pay-off.