Record windfall for U.K. TV exex

No one ever got rich working for an ITV station — until now.

On Tuesday, a fortunate group of 15 top executives at London Weekend Television shared an unprecedented T50 million ($ 75 million) windfall from a stock-related management incentive plan which they signed up for back in 1989.

Company chairman Christopher Bland, who devised the scheme, is the biggest winner, pocketing LWT stock worth over T9 million ($ 13.5 million), a return of more than 1,000% on his original T400,000 ($ 600,000) investment. Chief executive Greg Dyke gets T6.9 million ($ 10.3 million), while program chief Nick Elliott and arts supremo Melyvn Bragg both take T2.9 million ($ 4.3 million).

Another 38 lower-ranking LWT execs are splitting a further T20 million between them.

For many, this is simply the reward for being in the right place at the right time. Such a deal is unlikely ever to be repeated. It was devised as a way of handcuffing LWT’s top execs to the company prior to the 1991 ITV license auction , giving them a strong motive to decline offers to work for rival bidders.

LWT duly retained its broadcasting license for the relatively meager sum of T 7.6 million ($ 11.4 million) a year, defeating on quality grounds a much higher cash bid from a group led by Polygram.

But critics of the LWT scheme point out that no other winning ITV company has rewarded its execs so handsomely, restricting themselves at best to handing out a few thousand share options or bonuses for the top men of no more than a couple of hundred thousand pounds.

Union leaders have called the LWT millions “blood money,” obtained by sacking large numbers of employees to achieve greater operating efficiency, thus boosting the company’s stock price. They are campaigning for the managers to share some of their personal profits with staff.

Under the scheme, a select group of managers was given the opportunity to buy a fixed number of special shares, at the open market price of 83 pence each. These would be converted into ordinary shares after four years, whether the market price had risen or fallen.

Additionally, if the stock prices rose above certain levels, this would trigger a multiplication in the number of ordinary shares received for each special share. In the event, LWT’s financial performance has been so strong that the stock price has risen to 465 pence, and each exec Tuesday received four shares for the price of one, the maximum under the scheme.

LWT execs are keen to point out that they risked their own money investing in the plan.

When the scheme finally matured Tuesday, the 53 LWT execs were effectively handed a 15% stake in the company, valued at about T7O million ($ 115 million). They immediately sold 3.78%, but have undertaken not to sell any more until next August.

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