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
Thursday 23 November 1995
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.
- 1 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to join show
- 4 Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
- 5 How to gain confidence and maximise your sexual potential
Boston Marathon runner's search for mystery man she kissed ends with letter from his wife
Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
Italian police 'reveal' what Jesus looked like as a young boy
Mysterious 'X-Files' sounds heard miles above the Earth
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
Andy McSmith's Sketch: Feisty audience is the real star of an enlightening show
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...