BAE Attacks Report Of '£18m Windfall' For Boss
BAE Systems has denied a report that its boss could pocket £18m overnight if the defence company's multi-billion pound merger with France's EADS goes ahead.
The Daily Mail claimed that the British firm's chief executive, Ian King, could have received the windfall from numerous share options accumulated during his 36 years with the company.
The paper said while they would usually take years to mature, a merger could trigger a clause in the company's annual report that sees the shares all pay out at once - resulting in a windfall of £17.8m.
The portfolio reportedly includes more than one million BAE shares, worth more than £3.36m at the current price and options on around 4.5 million shares in executive reward schemes.
BAE later moved to defend his position with a statement that sought to clarify a number of areas.
"The article in today's Daily Mail is grossly misleading. Over a period of 36 years Ian King has accumulated shares and options over shares which he has chosen not to cash in, in view of his long commitment to the company.
"The amounts mentioned in the article are wildly speculative and inaccurate. Many of the options that Mr King could have cashed in are not related to the proposed transaction. As the article notes it is not clear whether any or all of the options would actually be paid out in the event the proposed transaction does proceed."
Amid the continuing merger negotiations, the boss of EADS has told a German newspaper he is prepared to offer guarantees for jobs and certain sites under the proposed tie-up.
"I am so convinced about our project that I am ready to talk about attractive job and site guarantees which I could not consider for EADS," chief executive Tom Enders said.
If the controversial merger goes ahead, it would create the world's biggest aerospace firm with a market value of around £40bn.
But the deal requires the approval of the British, German and French governments - and the US is also taking a close interest because of its work with BAE.
Leading shareholders joined some government officials in questioning the terms of the deal, which must be thrashed out by a deadline of October 10 set by the Takeover Panel.