PowerGen chief made £1.2m profit on share options

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The Independent Online
Six executives at the head of PowerGen, the privatised electricity company, made hundreds of thousands of pounds each on share options last year, according to a management pay survey published today.

According to research from Income Data Services (IDS), an independent research company, PowerGen's chief executive, Edmund Wallis, made more than £1.2m on top of his basic salary of £400,000 by exercising share options. Five of his fellow PowerGen directors each made paper profits of between £783,000 and £931,000.

The PowerGen executives occupy six of the top seven places on a list of 85 share options analysed by IDS. The report concludes that directors' share option profits are likely to continue. "The ability of directors to make large gains in the future is unlikely to be curbed by the growing adoption of company performance conditions on the exercise of share options," it said.

The disclosures come as the Government today publishes details of the proposed sale of its remaining 40 per cent stake in PowerGen and National Power.

The IDS survey also found that 80 per cent of companies achieved the 6 per cent real increase in earnings per share over three years, which is the most commonly applied benchmark for the exercise of options.

The average gain by executives of quoted companies exercising options last year was £170,000. But the figures are distorted by the gains made by PowerGen executives. The median gain among executives worked out at £61,000.