S&N bonuses soar as shares slump

A bumper payout for Bob Ivell, the former boss of Scottish & Newcastle's pubs arm, helped tip the brewer's total bonus bill over the £1m mark in a year when its shares were the worst performers in the FTSE 100.

A bumper payout for Bob Ivell, the former boss of Scottish & Newcastle's pubs arm, helped tip the brewer's total bonus bill over the £1m mark in a year when its shares were the worst performers in the FTSE 100.

The company, which sold its pubs estate last year for £2.5bn to focus on brewing, paid its seven executive directors performance-related bonuses totalling £1.3m last year, its annual report revealed yesterday.

Mr Ivell, who left the group following the sale of its pubs arm to Spirit Group in November, was awarded a £465,000 bonus - one-and-a-half times his basic salary - taking his total salary package to £640,000 and making him the group's second best paid employee in 2003.

Tony Froggatt, who succeeded Sir Brian Stewart as chief executive last May, was paid £767,000 for the eight months he has spent at the company, including a £206,900 bonus.

A group spokeswoman said Mr Ivell's bonus was agreed ahead of the pubs sale to encourage him to stay on. Each of S&N Retail's seven executive directors received a bonus worth 150 per cent of their base salary, she added.

Although the magnitude of the group's bonus bill may surprise investors, given the slump in the company's market valuation, S&N's annual report states that bonuses are calculated based on how its profits compare with its cost of capital, and not how its shares perform. Last year its shares fell from 477p to 378p: their recovery so far this year to 430.75p has been largely driven by takeover speculation.

Mr Froggatt, who joined on a basic salary of £400,000, will earn £630,000 a year going forward. Sir Brian, who joined Standard Life as chairman last year, will be paid £300,000 for his non-executive chairman's role at S&N. His total pension pot was worth £7.6m at the end of December, while Mr Ivell's was worth £1.7m. An option to take a cash lump sum of £890,000 boosted Mr Ivell's total pot.

Mr Ivell, 52, is working on a bid for the Premier Lodge hotels business that formed part of S&N Retail.