Enron: £6m for four days' work

FIFTEEN senior employees of collapsed energy group Enron shared a bonus bonanza of £6m for doing four days' work as the company sank beneath £20bn of debts.

The windfalls were paid out by PricewaterhouseCoopers, the accountancy firm appointed to oversee the repayment of as much money as possible to Enron's thousands of creditors. The cash was intended to 'incentivise' managers at the British trading subsidiary Enron Direct.

PwC said: 'Key members of the Enron Direct management team were unwilling to assist in progressing a rapid sale of the business unless incentive agreements were implemented.'

PwC moved into Enron Direct on 29 November and spent from the weekend of 30 November trying to sell the business. By 4 December, British Gas retail group Centrica had agreed to pay £95.5m for the division. 'The Enron team worked day and night for four days to get a good price,' said administrator Steven Pearson, speaking at the Enron Direct creditors' meeting today. Pearson said the bonus payments were shared out equally, implying managers received more than £400,000 apiece.

Enron Direct has debts of around £170m and creditors expect to recover between 56% and 73% of their money. PwC made 1,200 of Enron's 1,450 British employees redundant within 48 hours of being appointed as administrators. The firm said morale among workers was extremely low.

Pearson told creditors: 'I don't think there would have been any chance at all of getting a deal at the thick end of £100m without the incentives.'

However, some creditors were deeply critical. Paul Snook, of insolvency specialist Begbies Traynor, said: '£400,000 for four days' work isn't bad going. My clients are intrigued by these incentive payments.'

Enron's collapse has triggered calls for improved accounting standards, particularly in the US. Andersen audited Enron's accounts and has been attacked for its relationship with the company. US Congressman Mike Oxley was today expected to propose that accountants be regulated by a private board that would set new restrictions against auditors offering some consulting services. Oxley was also set to insist that off-balance-sheet transactions be reported, bringing the US more in line with accounting rules in the UK.