The stock market listing of over-50s insurer and cruise operator Saga has secured its new boss a £2m golden handshake on top of a pay package that could total £2.9m.
Lance Batchelor, who joined as chief executive from Domino’s Pizza in March, has been handed £1m in cash to mark Saga’s admission to the stock market last Thursday and will be given a further £1m on the year anniversary of the listing.
Saga confirmed yesterday that Mr Batchelor has also been given the right to buy around 2.1 million shares in the company, vesting between 2017 and 2019, at its 185p float price.
Buying shares would cost Mr Batchelor around £4m, but would be worth much more if Saga’s price rises over the next five years. His one-off £2m payment and share options were contingent on a stock market listing of the business.
The 50-year old was head- hunted to lead Saga at the end of last year as part of plans by the company’s private equity owners Charterhouse Capital Management, CVC and Permira to beef up management ahead of a stock market listing. Mr Batchelor was praised during his time in charge of FTSE 250-listed Domino’s for overseeing a period of strong growth. Shares in the pizza delivery company fell 10 per cent on news of his departure.
Mr Batchelor enjoyed a similarly generous signing-on package when he moved to Domino’s from Tesco Mobile in 2011. The executive was handed 2 million Domino’s shares in two instalments as part of the move.
His cash reward and share options come in addition to a £650,000 base salary and participation in Saga’s bonus scheme, which entitles him to up £975,000 a year. He could also be handed £1.3m worth of shares annually as part of the company’s long term incentive plan and has the option to take home an additional £12,000 instead of a company car.
A submariner in the Royal Navy before going into business, Mr Batchelor earned £532,000 heading Domino’s in 2013, down from a total of £852,000 the year before.
Saga last month raised £550m from an initial public offering that valued it at £2.5bn. Shares in the company also failed to ‘pop’ on their first day of unconditional trading on Friday, closing just marginally higher than their offer price at 185.25p. Yesterday Saga closed up 0.75p at 185.75p.
The weak performance came despite the fact Saga priced its shares at the bottom end of its expected 185p to 245p range, amid waning appetite for new share offers among investors.
A spokesperson for Saga said of Mr Batchelor’s share options: “The options for Lance at the issue price are so that he has an interest over the long-term for increasing the share price. That means his interests are completely aligned to our 200,000 retail investors who are also customers. We think that’s the right thing to do.”
Several recently floated companies have struggled to maintain shares at their issue price, while retailer Fat Face recently cancelled plans for an IPO.