Takeover to bring pounds 4m in options

The directors of Eastern Electricity will make pounds 4m before tax from share options, assuming the takeover by Hanson goes ahead, writes Mary Fagan. Chief beneficiaries are John Devaney, chief executive, who will make about pounds 1.2m, and the chairman, James Smith, who will make about pounds 1m.

Many of the 6,000 employees in the group also stand to gain from the takeover. The potential profit on options in the company's Sharesave Scheme is about pounds 50m before tax. More than half the options awarded under the scheme are at an exercise price of pounds 1.75, compared with the offer price of pounds 9.75.

The smallest gain among the executive directors is about pounds 250,000 - to be made by Eric Anstee, finance director, who joined in January last year. The directors also hold shares in Eastern worth almost pounds 300,000 in total at the offer price.

Mr Devaney has been an outspoken defender of the concept of share options during the recent controversy over executive pay. He recently said that although Eastern decided to grant none last year, he felt the City would regret driving companies away from share option schemes within a few years "when they realise that management's agenda is no longer the City's". Share option schemes helped focus minds and in their absence something else would fill the gap.

Mr Devaney, who was paid pounds 377,000 last year including pension contributions, will become chairman of Eastern if the bid goes ahead.

He said he could not comment on what he may be paid in his proposed new role.

It is understood that, with the exception of Mr Smith, who was in any case due to retire in November, the management team will remain the same.

The issue of gains for executives is increasingly under the spotlight as bid frenzy in the electricity sector builds. Last week, Scottish Power said it had allowed pounds 20m in its pounds 1bn bid for Manweb to cover the cost of options and that most would go to staff with options under the savings- related scheme. The option price in the employee scheme is 175p, compared with the cash alternative of 915p.

Manweb's executive directors will make more than pounds 800,000 from exercising options at the level of the cash offer. Taken with their existing beneficial shareholdings in the company, the total potential gain rises to about pounds 2m.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Highs and lows of the cast's careers since 2004
New Articles
i100... with this review
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam