Poor Martin Gatto. The Somerfield FD sat down to contemplate a #2m bonus after the prospectus for flotation of the supermarket group was published. True, he had agreed to put about # 500,000 of that back into Somerfield shares, leaving a comfortable # 1.5m profit. A week later the offer price had been cut from 185p to 160p. Worse still, the flotation was salvaged only by cutting the price even further, to 145p. That left Gatto with a net profit of #480,000.
But there are three consolations. First, Somerfield has limped back to the stockmarket. Second, chief executive David Simons saw his #5.6m bonus shrink to #3m. And third, the falling issue price means the directors’ options are that much cheaper. Don’t cancel the holiday after all, Martin.