pounds 408,000 dividend bonanza for National Grid directors

Power flotation: Prospectus shows controversial payments to four grid directors to be supplemented by extra pounds 91,000

PETER RODGERS

Business Editor

Executive directors of National Grid will receive a total of three extra dividends worth pounds 408,000, it emerged yesterday in the prospectus for the flotation next month.

On top of a controversial special dividend of more than pounds 300,000 that the Government tried unsuccessfully to persuade them to give up, four directors will receive a further pounds 91,000.

These payments come from a pounds 63,000 dividend on a bonus share issue and pounds 28,000 dividend as part of a rights issue, and are in addition to normal dividends of pounds 26,000 on shares that they hold in the grid company.

The four directors, led by chairman David Jefferies, are sitting on shares worth pounds 1.34m and potential option profits worth at least another pounds 400,000. This is on the basis of the 228p closing price yesterday on the Stock Exchange's "grey market" ahead of the flotation.

The company defended the additional dividends partly on the grounds that the directors are obliged to subscribe pounds 63,000 of their own money to the rights issue if they are to maintain their holdings.

The prospectus also discloses that a fifth executive director, Roger Urwin, who has just joined as managing director for transmission from London Electricity, could earn just over pounds 250,000 with pension and maximum bonus.

Mr Urwin has not been given any National Grid Group shares or options in his new post, although as a shareholder in London Electricity he was entitled to receive more than pounds 200,000 of grid shares as a result of the flotation. His total London and NGG packages this year are well over pounds 1m, and he is to join a new performance-related bonus scheme to be set up by the grid.

Mr Urwin and another new director, Wob Gerretsen, are on two-year fixed contracts, which will become one-year rolling contracts when they expire. NGG rejected Labour criticisms that this broke the new Greenbury rules.

Furthermore, the directors will be given pounds 156,000 worth of shares in the pumped storage business that has just been spun off from National Grid as a prelude to a trade sale. The company valued the pumped storage business at pounds 450m. A spokesman said the shares for directors were to compensate for a fall in the value of their holdings in National Grid as a result of the demerger.

The shadow Chancellor, Gordon Brown, called their total package "the biggest privatisation scandal so far" and accused the Government of riding roughshod over the proposals of the Greenbury Committee on executive pay.

National Grid announced profits 7 per cent higher at pounds 330.7m on turnover 11 per cent higher at pounds 706m, but disappointed the City with higher-than- expected start-up losses of pounds 40m at Energis, the new telecoms subsidiary.

Yesterday, seven electricity company shareholders in NGG, with stakes of just over 50 per cent, announced the terms on which they would pass on their shares to their own shareholders. All holdings must be sold within a year.

News
people'It can last and it's terrifying'
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
Sport
footballStriker has moved on loan for the remainder of the season
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
New Articles
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
News
The five geckos were launched into space to find out about the effects of weightlessness on the creatures’ sex lives
i100
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
ebooksAn unforgettable anthology of contemporary reportage
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Arts and Entertainment
Word master: Self holds up a copy of his novel ‘Umbrella’
booksUnlike 'talented mediocrity' George Orwell, you must approach this writer dictionary in hand
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Technical Software Consultant (Excel, VBA, SQL, JAVA, Oracle)

£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...

SQL DBA/Developer

£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering