£5m shares-only pay package for International Power chief

Innogy unveils details of technology that promises to revolutionise the storage of energy
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The Independent Online

Peter Giller, the first chief executive of a UK company to be paid solely in shares, will be on a three-year package worth £5m at International Power, the demerged overseas arm of National Power.

Peter Giller, the first chief executive of a UK company to be paid solely in shares, will be on a three-year package worth £5m at International Power, the demerged overseas arm of National Power.

Details of Mr Giller's package emerged yesterday as International Power and Innogy, the UK arm of National Power, published their listing particulars ahead of the demerger in October. Innogy, which will be led by the former head of China Light and Power, Ross Sayers, also unveiled details of a revolutionary energy storage technology that it plans to market around the world. Analysts estimate that the technology, known as Regenesys, could add £1bn to Innogy's market capitalisation, which analysts believe will be in a range of £3.2bn to £4.2bn. Innogy plans to float the Regenesys unit in four to five years, by which time it could be worth as much as the core power station business, according to some estimates.

International Power is expected to have a market capitalisation of £3bn-£3.4bn. Mr Giller will be awarded £2m in shares as his base salary for the first three years. The number of shares will depend on the average market price in the first 20 days' trading. He will also receive an additional £1m in free shares for every 20 per cent increase in the share price. However, the shares will have to rise in value by a minimum of 52 per cent over the three-year period for any of the bonus shares to become payable. International Power will also have to achieve a 21 per cent increase in earnings per share over the three years.

If the shares rise by the minimum required to trigger the bonus then Mr Giller's initial allocation will be worth £3m and he will receive a further £2m in free shares. Mr Giller will not be able to cash in any shares for the first 12 months and will live on his own resources. "My children have left school and are making a living for themselves and I live a modest lifestyle anyhow," he said. Other International Power executives, including its chief operating officer, David Crane, and finance director Philip Cox, will be eligible for shares options worth 100 per cent of salary but Mr Giller said he personally favoured incentivising all 2,500 employees with share options.

International Power has ambitious expansion plans and has set its sights on increasing its portfolio of overseas generating plants from 6,400 megawatts to nearly 19,000 in the next four to five years, mainly by expanding into the US market. Innogy also has demanding growth targets aiming to increase its UK gas and electricity customers from 2.8 million to between four and five million over three to four years.

The generating portfolio, which will consist of 10 stations with a capacity of 9,200 megawatts when the Staythorpe gas-fired plant enters service, is expected to remain largely unchanged. But analysts say the real growth prospects lie with the Regenesys technology, which acts like a giant rechargeable battery, storing electricity when demand and prices are low and supplying it into the grid when demand is high. Innogy has struck a deal with National Grid to build a 15 megawatt Regenesys plant next to its Little Barford station, in Cambridgeshire, and has an agreement with the US utility Tennessee Valley Authority, which could lead to the construction of a plant in the North American state. Worldwide demand is estimated to be at least 3,000 megawatts.

Mr Sayers, Innogy's executive chairman, will be on a two-year contract and is being paid £450,000. He will also be entitled to an annual bonus to a maximum of 50 per cent of base salary and a long-term incentive scheme, worth a maximum of 150 per cent of salary.

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