Wickes director to repay part of bonus
Monday 14 October 1996
Repayment of the profit-related bonuses would be regarded in the City as an acknowledgement that they share some of the responsibility for the pounds 50m overstatement of profits that put the group into a crisis.
Wickes booked discounts from suppliers as profits before the goods were sold, over a period of four years or more, so the bonuses were based on profit levels that proved to be an illusion.
Mr Sweetbaum, who is not thought to have agreed yet on a repayment but is still in talks, was paid pounds 890,000 in profit-related bonuses last year.
Mr Llewellyn, who is now finance director of Caradon, was paid pounds 609,000 and another director, Michael Corner, who is likely to leave Wickes soon, was paid the same.
It is believed Mr Corner is also considering a repayment but it is not clear whether he will follow Mr Llewellyn's example.
This week the company is expected to publish a long-awaited circular giving its account of what happened during the years in which profits were overstated.
One issue in the negotiations over a possible repayment of bonuses is whether any of the non-executive directors of Wickes will be made to take some public share of responsibility for what went wrong.
The intention of the circular is to say who was responsible for the profits overstatement and how it happened, but there have been delays in getting the document to the point of signature by the board because of legal arguments over the wording.
It is thought that the circular will say the executive directors bore overall responsibility for what went wrong, not that they were directly implicated.
The target date for publication is believed to be Wednesday but Wickes has missed deadlines before.
The shares were suspended when the overstatement of profits came to light and are unlikely to be relisted until late this year or early next year, when the company will also need to announce a rights issue to replace some of the huge hole discovered in its balance sheet.
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