The finance director of Allied Domecq stands to make more then £5m if the drinks group is taken over as planned by Pernod Ricard.
Graham Hetherington, whom analysts say is unlikely to stay at the group after the merger, would benefit from the accelerated vesting of 860,000 stock options, disclosed in the company’s annual report in August.
Nearly 300,000 of those options can be purchased at 0.1p, and a further 560,000 at around £3.80. Pernod has offered £6.70 a share.
Hetherington could also cash in 150,000 shares which he owns already, and would receive 95% of his £979,000 salary if his contract is terminated. He could also receive ‘non-compete fees’ from Pernod to prevent him working for rivals.
Hetherington’s earnings from the deal could be dwarfed, though, by those of chief executive Philip Bowman. Bowman has roughly three times the number of shares and options Hetherington has.
Pernod tabled a bid last week for Allied, and other bidders are now considering their options. Constellation Brands, the US winemakers, said this week that it would consider a bid.
If a bid war were to ensue, the value of Hetherington’s options could soar. Analysts said the finance department at Allied will probably be a victim of the merger.
At an analysts’ meeting last week, the executive directors were asked about their future. Allied allegedly replied that the question was ‘inappropriate’ at this stage.
James Dawson, a drinks analyst at Charles Stanley, said: ‘In most takeovers head office savings tend to be the easy savings and that would include the finance department.’
Another analyst said: ‘Hetherington is well-regarded. He and Philip Bowman have done a very good job at Allied Domecq.’
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