Matalan golden handcuffs plan

MATALAN boss John Hargreaves is promising potential multi-million-pound payouts to his six top executives if the company is taken over in the next four years - and, in an unusual arrangement for the City, the money would come from his own pocket.

There has been a series of senior management departures at Matalan recently and Hargreaves, whose family still owns 52% of the shares, is keen to lock in the new top team. There has also been a spate of takeover rumours despite the controlling family stake.

Following consultations with institutional shareholders, the group is bringing in a new long-term incentive plan.

But it said that, because this would be of little value to the newly recruited executives in the short term, Hargreaves is to underpin his senior executives' share bonuses in the event of a takeover in the next few years.

Hargreaves' son Jason, who is sourcing director, is not included in the scheme.

The group stressed, however, that it 'should not be regarded as giving any indication whatsoever that the Hargreaves family intend to sell their shares in the company'.

Matalan's six senior executives will be required to build up a minimum shareholding in the company equal to double basic salary.

A third of their annual bonus will also have to be invested in the company's shares, and held for at least three years.

Hargreaves will have little trouble stumping up the cash if there is a change of control - his family stake in the firm is worth more than £500m.