Directors' payout reduced as Carillion's share price falters

The potential £17m windfall for the founding directors and managers of Carillion has been blown away by the collapse in Carillion's share price over the past four months.

The runaway value of Carillion shares in the earlier part of the year, climbing from 140p in January to 220p by the end of April, left 125 senior staff in line for a mouth-watering £8m, and a further rise of almost 60p would have triggered a £17m jackpot, the maximum payment provided by the unconventional incentive deal (CJ 1 May).

When Carillion demerged from Tarmac Aggregates three years ago, senior staff invested a total of £2.1m, giving them 1.5m shares with options for a further 6m. The distribution of four free shares for every one bought would only be triggered at a share price of 276p - anything less and the rewards would be scaled down pro rata.

The Founders Equity Plan's deal is based on the average share price over the six weeks to 31 August. Carillion's shares have averaged 160p over the past five weeks and at the start of this week their price was still off the boil.

Carillion's share price has been dragged down by the City's fears about contractors involved in PFI deals.