National Grid deal leaves KeySpan founder $27m in pocket

Robert Catell, the chairman and founder of KeySpan, the Brooklyn-based gas supplier that agreed to be bought by National Grid for $7.3bn (£4.2bn) last week, is set to pocket $27m in cash once the deal completes.

Under the terms of Mr Catell's compensation agreement, he must exercise all of the 1.9 million stock options he holds in the company where he has worked for nearly five decades.

At the $42 a share that National Grid has offered, his stock is worth about $82m, but $55m of that is wiped away as Mr Catell can only take home the difference between the bid and the minimum strike price of his options. President Robert Fani will take home $3.9m.

Mr Catell started at New York energy group Brooklyn Union in 1958 and gradually worked his way up the ranks until he was named chief executive in 1991 and then chairman five years later. In 1998 he merged Brooklyn Union with Long Island Lighting to create KeySpan.

After the National Grid deal he will become the executive chairman of the combined group's US operations, and deputy chairman of the larger group. The companies have yet to work out what his compensation will be going forward, said a KeySpan spokesman.

Mr Catell has written a book about his 48 years in the business, The CEO and the Monk: One Company's Journey to Profit and Purpose. The book recounts how he and the company ombudsman, Kenny Moore (a fromer monk) built the company together.

National Grid's chief executive, Roger Urwin, announced in January that he would step down at the end of the year, ceding his post to Steven Holliday, who is responsible for UK gas distribution and business services. The KeySpan deal is part of the British energy group's strategy to expand in the US.