In yet another outbreak of SARS [Senior Administrators’ Remuneration Surfeit], a triad of executive directors at Britain's Telewest Communications received their maximum bonus entitlement for 2002.
And why not, some might ask?
Well, at the end of its 2002 financial year, the struggling US-owned cable operator was as deeply in debt as ever with the red ink flowing to the extent of £5.2 billion ($8.27bn; €7.52bn) and a net annual loss of £506 million (minus £0.176 per share).
Despite what many observers believe to be fiscal water-treading, managing director Charles Burdick, finance director Mark Luiz and strategy director Stephen Cook between them collected a cool £440,000 on top of their annual salaries. Burdick added £160,000 to his annual pittance of £500,000; Cook garnished his £350,000 pay packet with an extra £140,000; and Luiz did likewise.
It seems that the criteria on which the bonuses are calculated exclude from the bottom line the cost of servicing the group’s massive debt. Nor do they take into account the decline in its share price which plummeted by 97% in 2001.
Burdick, it should be said in fairness, was not managing director during much of this difficult period. He was instead the group’s financial director, responsible for its debt management.
Nor was ousted ceo Adam Singer excluded from the party. The former executive who walked the corporate plank last year [WAMN: 01-Aug-02] soothed the pain of his passing with a £1.42 million payoff – twice his annual salary and benefits.
Enthused a Telewest spokesperson: “Despite a difficult year for the company, managers succeeded in meeting challenging EBITDA (earnings before interest, tax depreciation and amortization) targets after exceptionals.”
Data sourced from: Times Online (UK); additional content by WARC staff