Water chiefs awarded pounds 100,000 'bonus'

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The Independent Online
Three directors of North West Water, led by chief executive Brian Staples, shared in special one-off bonuses which totalled almost pounds 100,000 last year. The bonuses, for the "exceptional burden" caused by the pounds 1.8bn takeover of electricity company Norweb, were disclosed yesterday.

However, Sir Desmond Pitcher, the chairman of United Utilities, the name given to the merged group, waived his entitlement to the special bonus, nor did he take his full annual bonus for the year.

The existence of the success fees emerged as United Utilities unveiled details of a new long-term incentive scheme to replace annual bonuses and share options and a big increase in base salaries for senior directors.

Mr Staples, whose bonus for the Norweb deal was pounds 48,000, received total remuneration of pounds 380,700. This year his base salary will increase from pounds 235,000 to pounds 300,000 to reflect increased responsibilities following the merger.

Sir Desmond's base salary will rise to pounds 310,000 this year compared with pounds 255,600 last year and total remuneration including bonuses and benefits of pounds 346,200.

The other executives to get bonuses for pulling off the Norweb takeover were finance director Bob Ferguson and Derek Green, managing director of the regulated utility division, who received pounds 32,000 and pounds 18,650 respectively.

Under the new incentive plan, executive directors and selected senior executives will be eligible for short-term bonuses worth up to 40 per cent of base salary and payable in the form of shares.

They will also be entitled to long-term incentives based on the company's performance over a three-year period. In order to qualify for the incentives, which will be payable one-third in cash and two-thirds in shares, the company must rank in the top half of the FT-SE100 Index while earnings per share must exceed the retail price index by 2 per cent over the period.

United Utilities said that under normal circumstances the incentive plan would not pay out before 2000 and that the scheme was designed to align the interests of directors and shareholders by requiring two-thirds of the long-term bonus to be held in shares in trust for an additional two- year period.

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