Share options to yield big rewards

The savings-related share option scheme at VSEL will yield handsome rewards for more than 2,000 of the 5,500 strong workforce, although the average payout of pounds 3,000 per person will come as a small consolation with the threat of redundancy hanging in the air, writes John Shepherd.

A total of 831,364 share options at a striking price of 407p each were granted at the end of 1992 to directors and employees. Fewer than 100,000 have so far been exercised, which means that there is a pot of pounds 12.7m net to be shared among scheme members, who include retired employees and the dependants of deceased VSEL workers.

Most of the directors have already exercised a large number of their options, and no director has a substantial shareholding. The largest shareholder in the boardroom is Professor Shon Ffowes Williams, a non-executive who sold his Cambridge-based research company to VSEL for shares a couple of years ago. He has 78,039 shares valued at almost pounds 1.7m by GEC's pounds 21.50 bid offer.

Noel Davies, chief executive, owns 14,400 shares, Rob Holden, finance director, has 1,487, while Tony Peak, deputy chief executive has 16,238. The board owns a total of 115,550 shares, worth pounds 2.48m.

The board members are unlikely to walk away with thumping cheques for resigning after the company is taken over. Mr Davies, who earned pounds 176,000 last year, is in the last six months of his current contract.

Mr Holden and Mr Peak are on two-year rolling contracts.