From The Guardian 17.12.2008

Bosses of pub groups cash in £1.17m of incentive awards

* Simon Bowers
* The Guardian, Wednesday 17 December 2008
* Article history

The bosses of Britain's two largest pub landlords, which together control a quarter of the nation's outlets, have cashed in long-term incentive awards totalling £1.17m during the worst years in the history of both companies.

Giles Thorley, chief executive of Punch Taverns, has earned long-term incentive awards netting him a £837,000 windfall while Ted Tuppen, boss of Enterprise Inns, cashed a sustained performance payment with a gain of £331,000.

The payout was triggered despite a dismal year for Punch and Enterprise, during which neither Thorley nor Tuppen received a bonus; more than 70% was wiped off the firms' share price; each cancelled dividends, and analysts raised concerns about their respective abilities to service multibillion-pound debts.

Punch's annual report details payouts for Thorley from its long-term incentive plan (LTIP) and deferred share bonus plan of £759,000 and £114,000 respectively. This was on top of salary and benefits of £569,000, up 17% on 2007.

Enterprise's annual report shows Tuppen made £331,000 from a long-term incentive. Like Thorley, he was not awarded a bonus but took home £634,000 in pay and benefits for the year to 30 September.

The long-term performance payouts to Thorley were triggered in November last year when Punch's share price was 903p, while Tuppen's LTIP was exercised when shares were trading at 409p. Last night Punch shares closed up 5.25p at 59p and Enterprise finished 0.5p ahead at 62p.

As well as being landlord companies, Punch and Enterprise make money through exclusive beer supply contracts under "tied agreements" with their pubs. Some analysts have suggested the landlord groups, under pressure to meet debt repayments, are trying to squeeze more money out of their tenants than the struggling drinks trade can sustain. The firms insist this is not in their interest.

Thorley attracted controversy two years ago over a pay package worth £11.3m. The vast majority of the package related to a £10.2m gain on the exercise of options granted five years earlier, reflecting the stellar performance of Punch shares.