Norweb chiefs to get pounds 1.8m

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The Independent Online
DAVID HELLIER

Five board members of Norweb stand to make a total of around pounds 1.8m in profit from share options if the bid from North West Water eventually succeeds.

The biggest beneficiary will be Ken Harvey, the 55-year-old chairman and chief executive, whose outstanding share options become worth around pounds 1.225m following yesterday's cash and shares bid which values each Norweb share at pounds 10.15.

Mr Harvey, a former deputy chief engineer at the London Electricity Board, was granted a total of around 200,000 share options at prices ranging from pounds 1.75 to pounds 8.13, all of which will be triggered if a bid for the company goes through. Mr Harvey's salary and pension contribution last year came to pounds 256,000.

Peter McTague, retail director, stands to make a profit of around pounds 295,000 if the deal goes through.

If a higher bid comes in from one of the companies Norweb says it is still talking to, its management's share options will be worth even more. So far North West Water's board has made welcoming noises to the senior Norweb directors, who nevertheless rejected the deal.

Yesterday a spokesman said the idea would be to set up a joint management company which would give room for both sets of management.

Asked if any senior Norweb directors had been promised particular jobs in the enlarged company, he said: "Nobody has got down to the fine detail."

The spokesman said there had been intermittent contact between members of the two boards over the past six weeks.

The inspiration behind the move appears to have come from Sir Desmond Pitcher, North West Water's chairman, who considers himself Mr Merseyside.

Yesterday Sir Desmond said: "the companies will form a powerful combination". His reputation for abrasiveness and toughness - he has fallen out with a number of executives he has worked with, including Bob Thian, the former chief executive at North West, - will no doubt be causing some trepidation in the Norweb boardroom.

One City analyst, who knows both Sir Desmond and Mr Harvey, said he could not see them both sitting around the same boardroom table for long. "It would have to be a pretty damn big table, for one thing," he said. In spite of a knighthood and his status as a regional business baron, (he is chairman of the Merseyside Development Corporation and deputy chairman of Everton Football Club) thrice-married Sir Desmond is exceptionally conscious about his own image. Both at Littlewoods and at North West Water he has hired the public relations company Lynne Franks to handle his own publicity.

When he arrived at North West Water in 1993 he insisted on taking financial journalists through the company's financial results on his own, without the benefit of his finance director. Sources at the company suggest he was forced to give this up when it became obvious he was struggling to find answers to some of the more detailed questions.

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