ITV in Merger Countdown Mode as Head Honchos Tighten Belts

10 December 2003

In just fifty-three days a new exciting, dynamic, adventurous, lean (and infinitely more profitable) ITV plc will arise from the dying embers of Britain's two largest terrestrial broadcasters -- Carlton Communications and Granada.

At least that's what the merged entity hopes the denizens of Wall Street and London EC2 will believe when shares in the melded ITV start to trade on February 2.

Leading the hybrid will be a team of handpicked executives creamed from the top of both companies (mostly Granada alumni), belts tightened by several notches and termination payoffs cut in half should it all go horribly wrong. Music to the ears of Sumner M Redstone, Haim Saban and other interested stateside parties!

That's the gist of ITV's operational and executive framework explained in documents released Monday, detailing the finer points of the £5.1 billion ($8.89bn; €7.28bn) merger to shareholders of both companies.

Chief executive Charles Allen, currently chairman of Granada, will be deprived of his rolling two-year contract and the right "in certain circumstances" to walk away from his job with compensation at thirty days’ notice. Nor will he receive a penny more than his current annual pittance of £1,006,335 for running the combined company.

But there is a shred of comfort for Allen. Should he be fired (a not wholly improbable scenario, according to an unnamed institutional shareholder who told the Daily Telegraph: "You … have to question whether he is going to be around that long"), Allen is entitled to one year's salary plus free ITV shares worth up to 100% of his pay.

ITV’s finance director, Henry Staunton, is likewise shackled to the same chump change he earned at Granada, £538,890 per year.

The merger will be put to the vote by shareholders of both companies on January 13. Only those who believe the moon to be populated by green ten-metre gerbils believe the outcome to be anything other than a foregone conclusion.

Data sourced from: Times Online (UK); additional content by WARC staff