THOMSON chief executive Paul Brett was paid an incredible £4.043m in 1998, the company has revealed. Fellow directors also received massive sums, with chief operating officer Roger Burnell paid £2.014m and Thomson and UK distribution managing director Richard Bowden-Doyle taking £1.302m.
Former Lunn Poly managing director Ian Smith, who is now concentrating on running specialist tour operators, was paid £1.590m and former director Charles Newbold, who retired last month, £1.719m.
The enormous payments, detailed in the company’s report and accounts, came during a year when the company was looking to cut costs by cutting back on brochure supplies and reducing commission to non-performing agents through its controversial Preferred Agent Scheme.
The company was quick to point out that a large proportion of the payments were made up of one-off handouts from the previous owner, Thomson Corporation. These were a reward for last year’s float and will not be repeated. For example, some £3.295m of Brett’s money was from The Thomson Corporation, while the remaining £748,000 was paid by the Thomson Travel Group in an overall salary package.
However, city analysts said the sums were “extraordinary”.
“These are some of the biggest payouts we’ve seen in this country,” said one. “When you consider that taking a company to float is a few weeks of very hard work, I think it was worth their while.”
Overall salary packages paid by the Thomson Travel Group to top individuals are also likely to fall in 1999, because of how the company has been restructured following the float. For example, Brett received £380,000 in salary; £350,000 in bonus and £18,000 in allowance and benefits. Although Brett and his fellow directors are likely to receive a salary increase in 1999, it is unlikely the bonus payments will be so generous.
The directors also received several hundred thousand share options each in 1998, exercisable from 2001. The value of these options will depend upon the future performance of the company.
Although the group increased pre-tax profit by 10% to £122.9m, its shares performed poorly in 1998. Shares floated at 170p in May and finished the year at 165p.