Waste management business launches cash incentive plan for senior team

Specialist waste management business Augean has launched a cash long-term incentive plan for its management team in a bid to “retain and motivate” key employees during what it called a “potentially extended period of uncertainty” for the company following investigations by HMRC.

Earlier this year, the firm issued a profit warning and updated the markets of the impact of an HMRC investigation looking at whether the company had paid sufficient land fill tax in relation to its treatment and disposal of hazardous waste.

This morning, the company said it believes that the success of the firm over the next few years will depend to a “significant degree” on the performance of the management team.

The incentive plan will be awarded to the two executive directors, executive chairman Jim Meredith and chief financial officer Mark Fryer, and other key members of the management team.

Augean said: “The plan is designed to align and optimise the performance of the company for the benefit of all shareholders, with the management team sharing in the incremental value generated.  The performance target for the plan is therefore based on the company’s share price on the cessation of the plan in five years, or on a sale of the company should this occur earlier.

“The maximum value payable to all participants under the plan, in the event the performance criteria are met in full, would be £7m, of which £3.1m would be attributable to Jim Meredith and £1m would be attributable to Mark Fryer.

“Major shareholders have been consulted on the terms of the plan and have given their support.”

Augean has always defended its position that the appropriate landfill tax has been paid, saying: “Having taken advice from leading counsel and its solicitors, Augean continues to believe that both the previous assessments and these pre-assessment notifications are without merit. The group will robustly challenge these and any further landfill tax assessments that it may receive from HMRC, through the tax tribunal system if necessary.”

Last month, Augean announced it has started to see improved trading and increased profits in the six months to the end of June after selling two loss-making divisions.