The four top directors at UK turnaround specialist Melrose Industries are to share a bonus pot of £160m in one of the biggest corporate paydays in the City. The UK-listed engineering firm said on Wednesday it would pay out share bonuses to its three co-founders and the finance chief under a five-year incentive plan, which was approved by investors in 2012. Based on the average share price over the past 40 days of 234p, the total bonus pot is worth £240m. The quartet – Christopher Miller, executive chairman; David Roper, executive vice chairman; Simon Peckham, chief executive; and Geoff Martin, chief financial officer – are entitled to 68% of it. This means they will get £40m each in shares. The remainder of the pot will be shared between 20 senior managers. The executives can sell shares to cover the £70m of income tax due on the awards but must retain at least half the remaining shares for at least two years. They have never sold any shares, except to cover tax bills. At present, the four directors together own 2.25% of Melrose, which will rise to 3.1% after the share awards. The rest is owned by financial institutions led by BlackRock. Melrose stressed that the bonus plan was strongly aligned to shareholder returns, with £3.5bn returned to investors over the five-year period. The firm buys and turns around struggling manufacturing businesses before selling them on. Melrose’s share price has soared from 42.97p five years ago to 236p on Wednesday. The company was founded and floated on the stock market in 2003 as a cash shell by Miller, Roper and Peckham, who put about £3m into the business. Melrose is listed in the FTSE small cap index but is expected to rejoin the FTSE 250 soon. It declared a statutory loss before tax of £69.3m last year. Excluding restructuring, acquisition and disposal costs, it made an underlying pretax profit of £96m, with revenues of £889m. The bonus payouts are among the biggest in City history, but are dwarfed by the £70m pay package awarded to WPP chief executive Sir Martin Sorrell in 2015, including a £63m payout from a long-term incentive scheme, which triggered a shareholder revolt. Tony Pidgley, the founder and chairman of housebuilder Berkeley Group, received pay packets of £21.5m and £23.3m in the past two years. At Melrose, Peckham was paid £987,000 last year, while Martin got £803,000, Miller £549,000 and Roper £548,000. A new three-year incentive plan, which starts on Thursday, was endorsed by 83% of shareholders at an annual meeting earlier this month. It contains a number of new “shareholder-friendly” clauses, such as malus clauses, which mean share payouts can be clawed back if in certain circumstances. The size of the payout will depend on how much executives improve acquired businesses and sell them for. Last summer Melrose spent £2.2bn on Nortek, a US firm that makes kitchen stove hoods and extractor fans.
Melrose Industries, the UK engineering firm, has awarded its four top directors a shared bonus of £160m ($206m), one of the largest in the country's history. The company said it had been "pleased to have reached an agreement with our board and management team on this important matter". The four directors, who will receive £40m each in shares, already own 2.25% of the company collectively, and this figure will rise to 3.1% following the award.