Four directors each awarded £41.7m bonus
It has been revealed that four Melrose directors were paid a one-off bonus of £41.7m each last year, putting boardroom payments back into the spotlight.
The details were included in the company’s annual report published yesterday and comes just weeks after Melrose’s £8.1bn takeover bid of GKN received shareholder support.
One of the main criticisms of Melrose was that its approach enriches the directors rather than developing a company for the long term. However Melrose, which has the tag line of “buy, improve, sell”, argued that directors’ rewards were tied to creating value for all shareholders.
The 2017 payouts resulted from the vesting of the 2012 long-term incentive plan. It awarded huge payouts for chairman Chris Miller, vice-chairman David Roper, chief executive Simon Peckham and finance director Geoffrey Martin.
The plan paid out 7.5% of the index-adjusted growth in shareholder value of the company over that period.
The company highlighted that the creation of shareholder value over the same period was £3.6bn. A significant chunk of this came from the acquisition of Elster in 2012 for £1.8bn, which was sold for £3.3bn three years later. Melrose returned £2.4bn to shareholders
Each of the four directors were awarded more than 9m shares, based on a share price of £2.39. The remaining part of their bonus award, of around 45%, was paid in cash to meet tax and NI liabilities.
Peckham and Martin, also received annual bonuses for 2017 of 90% of their salary. This increased their total packages to £994,000 and £806,000 respectively, before the long term bonus.
