A FORMER member of staff at corporate broking group Cenkos’s operation in Edinburgh has launched a £3 million legal case against the company over a row involving a bonus scheme.
In its latest annual report the company detailed the dispute with a former member of staff over a so-called “cash-settled shadow equity scheme” which had been set up in 2009 for the Cenkos team in the capital.
The company, which acts as broker to Scottish Aim-quoted companies including Smart Metering Systems, has since confirmed that the former member of staff has now issued a High Court writ against the company, claiming £3.04m.
“The board believes that the size of this potential claim is frivolous and that appropriate accruals have already been made for any potential liability due,” Cenkos said in a statement to the stock market on the issue. “The company intends to defend any such claim vigorously.”
Cenkos said that following a re-organisation of its office in the second half of 2010, the scheme was ended and a number of staff had left the company.
“After taking legal advice, the directors are of the opinion that there will be no significant financial impact other than the amounts already accrued in 2010 and the legal costs involved, for which appropriate accruals have been made.”
Shadow equity plans are often established to link employees’ pay packages to the profitablity of a company or of a particular division.
At the company’s AGM in May chairman Gerry Aherne said despite difficult market conditions Cenkos had “made an encouraging start” to the current financial year.
“Although the market for initial public offerings and other fundraisings is weak, since the year-end we have successfully raised over £262m for our clients, which is a very creditable achievement in the current environment.”
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