Northern Electric gave directors share bonus

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The Independent Online
DIRECTORS in Northern Electric were awarded thousands of share options on 5 August, less than a week before the share price soared after the publication by the regulator, Offer, of new price controls.

Directors in the company were awarded more than 77,000 shares in total, exercisable at a price of 706p, compared with the a closing share price yesterday of 732p. David Morris, chairman, was the greatest beneficiary, with the award of 33,994 options.

The company said the decision to award the options was taken by an independent remuneration committee in June. A spokesman said the company was unaware of the new price controls until 10 August, the day before Offer published its price review.

'We received no information until last Wednesday. There was a lot of speculation but no information,' he said. He added that the options could not be exercised for three years.

The revelation comes at an embarrassing time, as the Stock Exchange is reviewing dealings in electricity shares before and after the Offer announcement. The Exchange is thought to be interested in whether directors in electricity companies bought shares in any of the companies in the run-up to the publication of the controls.

It emerged at the weekend that Denis Cassidy, a non-executive director of Seeboard, the south-eastern regional company, acquired 5,000 Seeboard shares three days before Offer's announcement. The company said Mr Cassidy was showing commitment to the company and the shares were bought well before the company or anyone linked to it had any knowledge of the price cap.

The Offer price controls were much more lenient than was envisaged and none of the companies is expected to reject the deal. The alternative, a reference to the Monopolies and Mergers Commission, was previously considered a possibility for some companies.