No-lose situation for Northern directors

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Northern Electric's directors stand to make windfall profits whether the takeover bid by Trafalgar House succeeds or not.

If Trafalgar wins, the offer of £11 cash for each share held is worth £1.4m to David Morris, Northern's part-time chairman. He owns 67,512 shares in the company, according to Northern's defence document, published in January. These are worth £742,000 at the bid price.

In addition he has 194,918 share options with exercise prices ranging from 175p to 706p. These are currently showing a profit of £687,264.

If the bid fails, Mr Morris will benefit from the loyalty incentive package, worth £5.07 a share, which Northern has said it will give shareholders if they keep their shares. This is worth £988,000 to Mr Morris.

Other directors in this win-win situation include Alan Groves, finance director, who makes £561,000 if the bid succeeds and £444,918 if it fails. Bill Hook, the operations director, makes £514,946 if Trafalgar wins and £405,813 if the bid fails.

Meanwhile a survey to be published today by Investors Chronicle shows that the bosses of Britain's top 25 companies, together with the heads of the recently privatised utilities, have realised at least £15m profits over the last three years from cashing in share options. They made a further £22m in unrealised profit from share options not yet cashed in.

Big winners include Bob Bauman, chairman of SmithKline Beecham, who sees his £1.9m salary supplemented by £970,000 from cashed-in share options since 1992. He also has unrealised profit of £3.5m.