Asda's chief executive, Archie Norman, has netted an instant profit of pounds 1.8m after exercising his right to buy more than 2.4 million shares in his company at 36p and selling them for 110p.
Mr Norman's share option windfall comes on top of his pounds 510,000 salary, including the pounds 138,000 performance-related bonus he drew in the year to April. It also follows a decision on his part to exercise 2 million options in July last year, boosting his pay package in 1995 by a further pounds 1.26m.
An Asda spokesman yesterday said: "This was the last day in which he could exercise them if he was to have fresh options issued to him. He has now been granted a further 791,895 options exercisable not before January 22 1999, at a price of 111.5p."
He denied that Mr Norman's decision was motivated by a wish to withdraw from the company in order to further his political career within the Tory party. "The position is as it has always been. This is an old rumour and nothing has changed. His commitment is to the company."
Even after the decision to exercise his options on Friday, Mr Norman retains a further 2 million-plus options, worth at least pounds 1.6m at today's prices. They can be cashed in at any time up to March 2002.
He was also granted 520,328 share options at 54.5p, of which half can be cashed in July 1997 and the other half a year later. With Asda shares at 108p yesterday, down 3p, he is sitting on a paper profit of pounds 250,000.
In September, as part of a bonus package first agreed in 1993, Mr Norman was granted the right to an additional 279,000 shares at just 1p each. His deputy chief executive, Allan Leighton, was granted 227,000 shares at the same option price.
Under the auspices of Mr Norman and Mr Leighton, who joined the company in 1992, Asda has been transformed from a company on the brink of collapse into Britain's third-biggest food retailer.
In 1991, it was struggling under pounds 1bn of debt. Shares reached a low of 23p in August 1992. Since then, Asda's market capitalisation has risen from pounds 640m to more than pounds 3bn.
Last year, the supermarket group announced a 35 per cent leap in profits before tax to pounds 246.2m in the year to the end of April 1995.