Climate sees Wood opt for share options

Published on Tuesday 20 April 2010 21:03

DIRECTORS at Wood Group were together awarded hundreds of thousands of share options last year after difficult market conditions meant they would not hit long-term incentive targets.

The Aberdeen group's annual report revealed that the options were awarded under a long-term retention scheme after it became clear that the "current market environment" meant they would not be able to meet incentive plan targets set in 2007.

Remuneration committee chairman John Morgan said the committee was concerned this raised retention issues for senior staff and also meant that an "outstanding performance" in 2008 would not be fully reflected in their financial rewards.

Although the committee decided it was "not appropriate" to reduce the targets under the scheme, it instead decided to award the share options to directors and 35 key senior managers who participate in the Long Term Incentive Plan.

Some 240,000 share options – with an exercise price of 3.5p – were granted to six executive directors. They are exercisable from 2013 onwards and potentially worth some 936,000 at the current market price.

The annual report showed that executive board members saw their bonuses fall by more than 30 per cent last year after profits slumped.

Basic boardroom salaries are being frozen for the second year running during 2010, but performance targets for future bonus payments have been relaxed.

Morgan said a condition – which required growth of 5 per cent over the Retail Prices Index to trigger full payment of deferred bonuses – meant the scheme was uncompetitive compared to those of the company's peers.

According to the report, chief executive Allister Langlands was the highest paid director last year.

On top of his 480,000 salary he received a 144,000 cash bonus – down from 210,000 in 2008 – and a 144,000 deferred bonus. Together with benefits, his total pay package was 782,000, down from 914,000.

Mark Papworth, chief executive of the gas turbine division, engineering director Mike Straughen and Les Thomas, responsible for production facilities, all received a 305,000 basic salary and total bonuses ranging from 154,000 to 234,000.

US-based finance director Alan Semple received a total package equivalent to around 625,000, down from 728,000.

Chairman Sir Ian Wood received 416,000, down from 484,000.

UK-based directors have been allowed to bring forward payment of their 2008 deferred bonus to March 2010 to mitigate tax changes for high earners.