Melrose bosses scoop £300m bonus bonanza
Windfall is triggered by sharp rise in share value over four years
TOP bosses at engineer Melrose are set to share a bonus bonanza of more than £300million in one of the biggest payouts of its type in British corporate history.
The private equity-style windfall will be triggered on Friday after a sharp rise in the value of the FTSE 100 company’s shares since 2020 when the incentive scheme was introduced.
The biggest winners will be recently departed co-founders Simon Peckham and Chris Miller, and finance director Geoffrey Martin who has also just left.
They will scoop almost half the jackpot, with the rest divided among up to 20 other managers.
Melrose’s fortunes have been transformed by a series of deals, including the controversial purchase of defence giant GKN in 2018.
It is now a pure-play aerospace business after last year’s demerger of GKN’s automotive arm into another stock market company, Dowlais, which gave the share price a further boost.
The company is now worth more than £8billion, having almost trebled in value since the executive bonus scheme was agreed with shareholders four years ago.
The scheme, which will pay out in shares, equates to 7.5 percent of the rise in Melrose’s stock market value since.
It was valued at £302million at the end of last year but sources say it may now be worth as much £320million.
The scale of the awards is set to reignite the debate about ‘fat cat’ pay. However, sources close to Melrose insist this scheme rewards genuine long-term wealth creation.
They point out that £1 invested when Melrose in 2005 would be worth £31.39 today, with total returns to shareholders of £8.2 billion in that time.
Melrose, which specialised in turning round ailing industrial companies, has already made its co-founders millionaires many times over.
In 2017 alone Peckham, Miller, Martin and fellow co-founder David Roper scooped more than £42million each, which former business secretary Sir Vince Cable slammed as ‘an absolutely scandalous 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 £8billion after a bitter takeover battle.
Around 1,000 jobs were cut, more redundancies were made 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 for Airbus and Boeing.
Melrose recently raised its profit forecasts after doubling earnings to £420million in 2023 as it benefits from a global rebound in aviation.