Bosses in £310m shares bonanza

DIRECTORS of FTSE 100 companies netted themselves a £310m cash bonanza over the past eight months by selling shares in the companies they run, a huge increase over the same period a year ago.

After three years of corporate agony epitomised by falling profitability and weak share prices, hundreds of company bosses are cashing in shares in their own companies.

A total of 719 individual share sales worth £309.9m were carried out by senior executives of FTSE 100 companies between 31 December and 12 August this year, according to data supplied by financial analysts Hemscott.

The number of directors selling shares in their companies has jumped 25% since the same period last year when 676 transactions valued at £251.27m took place.

The most recent headline grabber was BSkyB chief Tony Ball, the second highest-paid FTSE 100 director, who added another £9.28m to his personal fortune last week by selling 1.8m shares and options in the satellite TV operator - on the same day it marked its return to profit.

Andrew Tusa, a fund manager at Deutsche Asset Management, said buying and selling by directors was always a good indicator of the health of the market, and the recent surge on the FTSE has presented an opportunity for directors to sell stock.

'They would have felt the pain from having their wealth tied up in equity markets that have done nothing but go down for quite some time, and now might seem like a good time to cash in,' he said.

Dozens of other high-profile executives struck it rich in recent months. The two biggest beneficiaries in the year to date have been Ryanair chief executive Michael O'Leary and former non-executive director Declan Ryan. Both pocketed £16.87m in June, just weeks before the airline announced lower profit margins and fare yields for the first quarter.

Tzur Daboosh, the co-founder of mobile software company Emblaze Systems who quit the board in June, raked in £11.6m while Patrick Cryne, the founder and outgoing boss of medical software group iSoft, enjoyed a £10.7m windfall after selling five million shares in March. ISoft is in advanced talks on a £700m merger with Torex.

Corporate governance consultancy Pensions Investment Research Consultants advocates a holding period to prevent directors dumping shares even after performance targets have been met.

'It is our view that directors should at all times maintain a reasonable level of interest in the company they are directors of,' said David Somerlinck, corporate governance policy manager with the PIRC.