Melrose bosses take home £42m each ahead of GKN takeover
Melrose said executives helped create £3.6bn in value for shareholders between 2012 and 2017.
Top bosses at turnaround specialist Melrose have raked in pay packets worth nearly £42 million ahead of the company’s pending takeover of British engineering giant GKN.
Figures detailed in its annual report showed four executives benefited from the payout of a five-year long-term incentive plan (LTIP), which meant the top brass were handed an extra £41.7 million each on top of their salaries for 2017.
Executive chairman Christopher Miller, executive vice chairman David Roper, chief executive Simon Peckham, and group finance director Geoffrey Martin all claimed the awards.
Melrose said the LTIP payment – which was approved back in 2012 – was linked to the creation of £3.6 billion in value for shareholders between 2012 and 2017, representing an average annual return of 22%.
The company’s remuneration committee added that the performance “validates” the incentive arrangement as “highly effective and essential”.
“We believe that this remuneration strategy has also directly driven historical outperformance when compared with our competitors and supported the company’s success.
“In this regard, our remuneration arrangements are tailored to the culture and strategy of the company and provide a strong platform for the ongoing long-term success of the company,” it said in the annual report.
Melrose is a company which has tremendous support from long-term institutions, pension funds and investors who entrust us to look after their interests for the long term Melrose
This year, executives are expected to see their total remuneration to return roughly to levels last seen in 2016 – when they earned anywhere between £548,000 and £987,000 each.
However, if executives meet value creation targets as part of their new incentive plan, major payouts will again be on the cards for 2020.
By that time the company could be the owner of GKN, having won the backing of the engineering giant’s shareholders last month following a protracted hostile battle for the firm.
Melrose is still awaiting UK Government approval for its £8.1 billion acquisition, which could still be referred to the Competition and Markets Authority.
Business Secretary Greg Clark said last month that the Government had a “statutory responsibility to consider whether the merger in its proposed final form gives rise to public interest concerns in the areas of media plurality, financial stability and national security”.
He added: “This assessment will be made by the appropriate authorities and the conclusion set out in due course.”
Melrose said on Wednesday that it was still in talks over the deal: “We are continuing our discussions with all parties to enforce in law the binding undertakings we have already given to the UK Government.
“We welcome scrutiny from all legitimate agencies. Melrose is a British company with the best interests of the UK at the centre of everything we do.”