By Ron Coates, 20 August 2004 13:15
NEWS Marconi directors and senior managers yesterday cashed in £13m worth of bonus shares.
This is their first bonus since the company was restructured off the edge of bankruptcy in May of last year. Marconi has slashed its debt and boosted the total value of its shares by £1.45bn since its creditors swapped debt for shares.
But it's still nice money. Top of the heap was CEO Mike Parton, who cashed in 84 per cent of his one million bonus shares for £5m. He was closely followed by COO Mike Donovan, who cashed in 532,000 of his 600,000 free shares for £3.14m. Chairman John Devaney scraped by with just £566,400.
Another 47 senior managers cashed in an average of around £100,000 worth of shares while another 300 Marconi senior managers were awarded share options.
And there could be more to come. The shares sold yesterday represent two of five possible tranches of shares to be awarded on a performance basis to directors and senior managers.
When the company was restructured last year, cash bonuses were abolished and replaced with share options based on Marconi's share price and its repayment of its debt. Marconi once had a stock market value of £30bn, but wild over-investment and the collapse of the telecoms market three years ago left it with debts that it had no hope of paying.
Parton then took over as CEO and negotiated a deal with the company's creditors which gave them 99.5 per cent of the equity. When he replaced Lord Simpson three years ago he gave up any right to a payoff if his contract was terminated.
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