At Lookers, according to the report just published, Ken Surgenor who runs the show, had a salary of £363,000 for 2006 and got a tidy little annual bonus that nearly beat his pay – £350,000. The combined sum put him ahead of his 2005 total by 44%.
The keeper of the Lookers corporate purse, finance director David Dyson also had a good year. His salary was £233,000 and his annual bonus was £225,000 meaning that his total take was also exactly 44% up on the previous year.
The best total return for the ops guys within Lookers was £330,000.
Lookers has a performance bonus scheme that pays out if the directors manage to drive the company’s earnings faster than the rate of inflation. The Executive Incentive Performance Plan pays out if, by the end of next year, company earnings exceed the rate of inflation by 10% or more.
If it does, 20% of salary is paid out. There is then a scale which pays out up to double annual salary when the scale peaks at 35% over RPI. Based on his salary at the end of 2006, Ken Surgenor could make £800,000 and Dyson, £510,000.
When the bonuses are paid, 20% has to be tipped back into the company’s shares and a further 30% can be applied to purchases under the management share plan.
But the reward for running a successful company does not end there. There are also executive share options. Surgenor and Dyson both were given shares last March which they can buy in December next year. The quantities respectively are 292,000 and 187,000. The nice thing about the arrangement is that they can buy those shares at 5p, the current price is 215p.
The Lookers share price rise in the year to date was 36%. If the company can go on pushing it at that rate, the shareholders will be pleased enough to smile broadly as the two Lookers leaders trigger those options at 5p and lock away shares worth near enough a million quid.