Ex-Mirror Boss Bailey Lands £400,000 Payout
The former chief executive of Trinity Mirror is to land a windfall of about £400,000 from an incentive scheme triggered by a recent surge in the newspaper publisher's share price.
Sky News can reveal that Sly Bailey, who stepped down as the boss of the Daily Mirror owner in June 2012, will receive the payout under its 2011 long-term incentive plan (LTIP).
The payment to Ms Bailey will be disclosed in Trinity Mirror's annual report for 2013, which will be published alongside its full-year results on Thursday.
It may cause consternation among the group's shareholders, who saw Trinity Mirror's share price slump under her leadership amid broader concerns about the future of the newspaper sector.
Under the 2011 LTIP scheme, Ms Bailey was entitled to a maximum award of just over 379,000 Trinity Mirror shares, which would have been worth almost £820,000 at Wednesday afternoon's share price of approximately 216p.
However, Trinity Mirror's remuneration committee is said to have decided that the share scheme should pay out about half of the potential maximum after an assessment of the share price performance of 15 UK-based media companies. That peer group includes BSkyB, the owner of Sky News.
An insider said that the board and remuneration committee had decided to make a further discretionary reduction in the LTIP awards, which the annual report makes clear it is entitled to do. The reduction applies to all recipients of the 2011 awards and not only Ms Bailey, they added.
The value of the award will appear to be lower in the 2013 annual report because it is calculated based on the average share price during the final three months of last year, since when Trinity Mirror's shares have continued to rise.
"Irrespective of TSR (total shareholder return) performance, before any vesting can occur the Committee must be satisfied that the underlying performance of the Company has been satisfactory throughout the relevant performance period," the company said last year.
People close to Trinity Mirror said its board had examined whether it was possible to cancel Ms Bailey's deferred share award altogether but had concluded that it was not possible.
Directors had not expected the 2011 scheme to pay out at all at the time of the award three years ago because of the challenges facing Trinity Mirror, a source said.
Since her departure, when she received a £900,000 payoff, Ms Bailey's successor, Simon Fox, has overseen a surge in its share price, including a market-beating 80% increase in the last 12 months.
Mr Fox receives a basic salary of £500,000, one-third less than the £750,000 pay of Ms Bailey, while his potential cash bonus and LTIP potential awards are much lower than her entitlement.
Trinity Mirror has in recent months been increasingly linked to the tabloid phone-hacking scandal, although it has consistently denied any wrongdoing.
Last month, it took impairment charges of £925m related to the value of assets on its balance sheet, but at the same time upgraded its profit forecasts for the year.
Trinity Mirror declined to comment.