SSL executives to be paid to find a buyer

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The Independent Online

SSL International, the condoms and sandals manufacturer which held abortive bid talks with Reckitt Benckiser in 2003, is finalising a new pay policy that would ensure a bumper payout for its chief executive in the event of a takeover.

SSL International, the condoms and sandals manufacturer which held abortive bid talks with Reckitt Benckiser in 2003, is finalising a new pay policy that would ensure a bumper payout for its chief executive in the event of a takeover.

The company has been the subject of frenzied bid speculation in recent months and shareholders are keen to ensure that Garry Watts, chief executive since April last year, is not disincentivised from entering into talks.

One fund manager familiar with the consultations said they had been continuing for several months but that one issue remained outstanding.

He said: "This is not about erecting a 'for sale' sign over the business. We have to ensure a scheme that has demanding performance targets but where the chief executive can benefit personally either by achieving those targets or by crystallising shareholder value in another way.

"We need to make sure he is not encouraged to turn away someone who may want to acquire the business."

Full details of the new pay package will be set out in the company's annual report, due in a few weeks, but they are likely to include a big increase in the number of options and the scale of other bonuses available, plus specific clauses related to a change of control.

Mr Watts is currently on a one-year contract with a bonus of up to 50 per cent of salary, and was paid a total of £575,000 last year.

The company said it intended that Mr Watts be "neutrally incentivised", so that he is rewarded for crystallising shareholder value through a takeover as he would be by driving the operational performance of the business forward.

A review of SSL's executive pay policies was flagged in last year's annual report.

A renewed flurry of takeover speculation drove SSL shares up 7.75p to 273p yesterday, with Johnson & Johnson, the US healthcare conglomerate, tipped as a bidder.

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