article 2009 says it all25 Jul 2013 15:13
Nevertheless, this example is a case study in what's wrong with directors' pay. Let's consider it in terms of their overall contribution to, and reward from, the company. I calculate that John Condron and John Davis have lost a total of £9m on their ongoing shareholdings. On the other hand, I calculate that they have sold over £20m worth of shares since the flotation. Moreover, their combined salaries, bonuses and pension costs escalated from £2.3m following the flotation to £4.7m in 2007. This seems pretty asymmetrical when set against their overall performance for shareholders since the flotation: Yell floated at 285p in 2003 and has just completed a rescue share issue at 42p. Frankly, it will never in their lifetimes see 285p again. And yet, as surely as night follows day, the mechanism of dispensing new options and long-term incentive plan (LTIP) awards continues. Last year, they collected options on 6.5m shares at 67p. These have a meaningful prospect of paying out.