Tomkins rewards 'spotter': Mission to advise on US acquisitions earns Carr pounds 10m
Tuesday 24 August 1993
Between 1987 and 1990 the shopping list drawn up by Mr Carr cost Tomkins a total of dollars 890m, or nearly pounds 600m at today's exchange rates. He spotted Smith & Wesson, the gun maker, Murray Ohio Manufacturing Company and Philips Industries.
His dollars 15m payment is the result of a deal struck when he emigrated to the US with his family at the request of Tomkins in 1987. He was promised payment related to the increase in the value of the businesses he found.
The increase in value was measured from the time Tomkins bought the businesses, and was equivalent to 10 per cent of the increase. In return Mr Carr borrowed dollars 160,000 (pounds 110,000) to invest in the venture at the outset.
Greg Hutchings, chief executive, said yesterday: 'We were very nervous about going into the US, which has proved to be a graveyard for many UK companies.' The agreed deal meant that the onus was on Mr Carr to find successful targets for acquisition.
If the acquired companies had flopped Mr Carr would have been left unrewarded.
Mr Carr formerly worked with the merchant bank SG Warburg in London. He started work on the project as an independent consultant to Tomkins but soon after the purchase of Smith & Wesson in 1987 was hired on what Mr Hutchings described yesterday as an ordinary manager's salary. He is at present working for Tomkins in London, in charge of finding acquisitions overseas.
Details of the arrangement were disclosed in Tomkins' annual report, published yesterday.
It also revealed that Mr Hutchings received a 5.6 per cent pay rise and earned pounds 1.24m in 1993 compared with pounds 1.17m in 1992.
However, the bonus element - which among other things related to the company's share price - fell. During the past 12 months, and particularly since the acquisition last autumn of the baker RHM, the shares have underperformed the market.
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