ABI salutes bonus cap at Stanley Leisure

Stanley Leisure, the z300m-turnover racing and casino business, has introduced a performance-related bonus scheme for directors that won’t scare the horses.

Under the scheme, bonuses of z5,000 will be paid to each director if earnings per share grow by at least 2% more than the rate of inflation.

Faster growth means bigger bonuses, but the maximum pay-out is z20,000.

These limits will be inflation-adjusted in future years.

Furthermore, bonuses will be payable in two equal installments. Directors will only get the second half of their payout if earnings per share (EPS) do not fall in the next year. Richard Regan, head of investments at the Association of British Insurers, particularly welcomed this part of the scheme, as it helps ‘to create a community of interest with long-term investors who want to see sustained growth in financial performance’.

‘The benefit of the scheme is that it demands a year-on-year improvement in EPS, if the figure dips in any one year there is no bonus pay-out,’ said Paul Olive, finance director. Although Stanley Leisure’s EPS figure actually fell by 12% for the year 1995/96, analyst BZW forecast better news for the directors in the scheme with an estimated growth of 40% EPS to 26.2p for 96/97.

The scheme, devised by the company’s remuneration committee, is subject to shareholders’ approval at the agm next month.