Golden handshakes from ITV merger

TAKEOVER details of the £5bn merger of Granada and Carlton to create a single ITV were overshadowed by pay- offs of £3m to former directors.

Carlton's ousted chief executive Michael Green, finance director Paul Murray and Granada's commercial director Graham Parrott, will all collect golden handshakes.

The cost of the merger and bringing the new ITV to the stock market is £26m.

In keeping with the fallen fortunes of the former ITV giants, there was a subdued air about the merger perks. Granada boss Charles Allen, whom many think lucky to have kept his job, will cut his two years' service contract to one year, without compensation. His starting salary will be just over £1m. Share awards and bonuses could take him up to £3m if ITV is taken over.

Finance director Henry Staunton, who earns £539,000, will drop from a two-year contract to one. Compensation will be paid monthly rather than in a lump sum if either leaves.

Green, who had no contract, had built up entitlements from his 34 years at Carlton worth £1.4m. Green transformed Carlton into a substantial media player.

His pay-off is one year's salary plus a bonus. The board may have decided that his fierce battle to survive has aged him and added two years to his pension entitlements. He had already built up a £134,000 a year pension.

The main interest for investors is whether a foreign predator might still step in.

Both sets of shareholders vote on 13 January. Dealings in the new ITV shares begin on 2 February.

Carlton shares, which had slumped from a peak of £9 to 68p in March, have bounced to 242 1/2p. Granada, which had fallen from 270p to 45p, have recovered to 128 1/4p. So option hurdles for the management will be set higher than first seemed likely.