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.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Sport
ESPN footage showed a split-screen Murray’s partner Kim Sears and Berdych’s partner Ester Satorova 'sporting' their jewellery
tennis
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
ebooks
ebooksA special investigation by Andy McSmith
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
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

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee