March 19, 2010 2:00 am
ITV shareholders expressed surprise yesterday at the £620,000 "golden hello" offered to Adam Crozier, the troubled broadcaster's new chief executive, in addition to a salary and benefits package of £860,000 a year.
Mr Crozier, set to join the company on April 26, will receive £200,000 in cash and £420,000 in shares, collectible in three tranches over 18 months.
One investor said: "I was absolutely amazed when I heard that." Another said it was "out of place" for the company to be paying welcome rewards at a time when financial packages were under scrutiny and ITV had cut thousands of jobs to ensure its survival.
A person close to the company said "it's the price of delivering Adam" from his current employers, Royal Mail.
The UK's largest broadcaster also revealed in its annual report that Michael Grade, who was executive chairman until December 31, received a bonus of £1.16m for reaching targets on cost-cutting, management of the balance sheet and cash-conversion.
Mr Crozier's package will be worth up to £16m over five years if stringent performance targets are reached. It includes a maximum 150 per cent bonus, a 9 per cent pension contribution and a 12-month notice period. He will be given a one-off opportunity to receive for free up to 4.1m ITV shares in 2013, which vest in full only if ITV's share price and dividend performance beats that of 75 per cent of a comparator group including British Sky Broadcasting, Vivendi and Virgin Media.
The basic package is less than that of Mr Grade, who received £962,000, but more than his pay at Royal Mail.
Executive pay was a critical part of the tortured succession process at ITV in 2009 after investors put pressure on Mr Grade to step down a year early.
This month, ITV reported a further 7.4 per cent fall in revenue to £1.88bn and a reduction in pre-tax profit of 3.6 per cent to £108m.
ITV's shares were boosted by a report in the Financial Times that relief from burdensome regulation could come sooner than the market had realised, and by the decision of the Office of Fair Trading not to block the sale of its social media website, Friends Reunited.
Shares in ITV closed up 0.95p at 54.75p.
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