Experts said the six directors would automatically be entitled to pounds 7.4m, which they can take immediately. The remainder of the pounds 9m, together with the phantom options, are likely to be subject to negotiations as the exercise dates have not yet arrived. Directors who stay on may also decide not to take their full entitlements but instead transfer them into a new benefits package in the merged company.
The phantom options, granted in 1993, are cash bonuses linked to the growth of TSB's share price above a base line of 143p, compared with last night's close of 353p. They provide the same profit as a conventional option without the need to buy any shares.
Peter Ellwood, the chief executive, would be eligible for a payment of pounds 604,000, John Burns for pounds 402,000, John Elbourne for pounds 424,000 and Michael Fairey for pounds 265,000. These four board members, together with two others - Hugh Freedberg and the chairman Sir Nicholas Goodison - are also set to make a pounds 5.66m pre-tax profit on conventional share options.
Sir Nicholas leads with pounds 1.42m, taking his total potential reward to nearly pounds 2.3m, followed closedly by Mr Ellwood with pounds 1.3m, bringing him a possible total of pounds 2.7m.
These figures are based on options listed in the most recent annual report, for 1994. TSB refused to say whether there had been any change in the number of options held by directors since the end of the 1994 financial year. The directors are also in line for a further pounds 1.777m, assuming they exercise their options and receive the special dividend of 68p a share promised as part of the merger terms.
The executive members of the board also have a series of other options that they can exercise from various starting dates over the next four years, with the first in March next year. These are showing a paper gain of pounds 1.7m.
The bonanza awaiting TSB executive directors
Paper profit: options exercisable 1994-5
Special dividend @ 68p
Paper profit: other options
First year other options exercisable
JA Burns 975,000 290,000 178,000 1996 402,000
JK Elbourne 900,000 278,000 257,000 96 -98 424, 000
PB Ellwood 1.3m 424,000 360,000 96-97 604,000
ME Fairey 81,000 24,000 378,000 96-99 265,000
HR Freedberg 990,000 325,000 110,000 96-97
N Goodison 1.4m 436,000 420,000 96-99
TOTAL 5.660m 1.777m 1.703m 1.695m