- Private equity-style windfall to go live on Friday
Engineer Melrose’s top bosses will share in a bonus bonanza of more than £300m in one of the biggest payouts of its kind in British corporate history.
Private equity-style windfall to go live on Friday after a sharp rise in FTSE 100 company share value since 2020, when the incentive plan was introduced.
The biggest winners will be co-founders Simon Peckham and Chris Miller, recently deceased, and chief financial officer Geoffrey Martin, who has also just left.
In the money: The biggest winners will be recently deceased co-founders Simon Peckham, pictured, and Chris Miller.
They will take home almost half of the jackpot and the rest will be divided among up to 20 other managers.
Melrose’s fortunes have been transformed by a series of deals, including the controversial purchase of defense giant GKN in 2018.
It is now a purely aerospace business, after GKN’s automotive division merged with another stock company, Dowlais, last year, which further boosted the share price.
The company is now worth more than £8bn, having almost tripled in value since the executive bonus scheme was agreed with shareholders four years ago.
The plan, which will be paid in shares, is equivalent to 7.5 percent of the increase in Melrose’s stock market value since then.
It was valued at £302m at the end of last year, but sources say it may now be worth up to £320m.
The magnitude of the awards will revive the debate about the remuneration of the “big guys.” However, sources close to Melrose insist that this plan rewards genuine long-term wealth creation.
They point out that £1 invested when Melrose in 2005 would be worth £31.39 today, with a total return to shareholders of £8.2bn over that time.
Melrose, which specialized in turning around struggling industrial companies, has already made its co-founders millionaires many times over.
In 2017 alone, Peckham, Miller, Martin and fellow co-founder David Roper raised more than £42m each, which former business secretary Sir Vince Cable criticized as “an absolutely outrageous amount”.
Peckham, 61, has no plans to retire. He is said to be setting up his own investment vehicle to buy undervalued British companies and revive them.
Under Peckham, Melrose snapped up GKN for £8bn after a bitter takeover battle.
Around 1,000 jobs were cut, more layoffs occurred during the pandemic and GKN’s car business was spun off. But it still employs 3,500 workers in the UK and is a leading supplier of aircraft wings and fuselages to Airbus and Boeing.
Melrose recently raised its profit forecasts after doubling its profits to £420m in 2023 as it benefits from a global aviation rebound.