Senior managers at McCarthy & Stone, Britain’s biggest builder of retirement homes, could earn tens of millions of pounds in bonuses under a restructuring plan that will see the taxpayerbacked Lloyds Banking Group emerging as its biggest shareholder.
The disclosure reported by The Daily Telegraph, is likely to ignite a debate about remuneration at companies in which Government-rescued banks are significant investors.
Under proposals to incentivise 16 directors and other executives – including Howard Phillips, the housebuilder’s chief executive, who has been with the company for 22 years, and Michael Ball, its chief financial officer — an “exit value plan”, linked to the enterprise value of the company, would be triggered in the event of a sale or another “valuing transaction”.
This would see a guaranteed £8m bonus pot paid out if the value of the company achieved through a transaction reached £500m or more. McCarthy & Stone was taken private in 2006 by an HBOS-led consortium in a deal worth just over £1.1bn after a hotlycontested bidding war.