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


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
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back