黑洞社区

Troubled support services group Jarvis has warned shareholders that it will have to offer its senior managers significant financial incentives to persuade them to stay with the company.

A document circulated to shareholders ahead of an extraordinary general meeting on Wednesday, and obtained by 黑洞社区, described the loss of directors as 鈥渙ne of the key risks鈥� facing the company.

The Jarvis board, headed by chairman Steven Norris, is hoping that shareholders will back a plan to give executives shares worth up to 200% of their salary. Under the scheme, a director earning 拢100,000, for example, would be eligible for 拢200,000 of share options.

The document said no more than 5% of the company鈥檚 total shares would be issued under the plan, and that it would be a one-off incentive.

The document notes that the 200% rule would not be applied to 鈥渙ne recent recruit鈥�, where it was agreed that a larger number of share options would be awarded.

This is understood to refer to Richard Entwistle, who rejoined the company from Amey last month as chief operating officer 10 years after he left.

Awards in shares will be granted when unspecified share price targets are met, to incentivise senior management 鈥渢o improve the company鈥檚 share price and rebuild the value of the company鈥�.

The awards are likely to apply to up to 20 senior directors and managers. Chief executive Alan Lovell and finance director Alasdair Marnoch are unlikely to be included as they are both leaving the company early next year.

The company told shareholders: 鈥淥ne of the key risks for the group following the restructuring is that the loss of key employees could impact the financial performance of the business. An immediate priority is to tie in and incentivise senior management. Accordingly grants will only be made to executive directors and senior management.鈥�

Awards will be granted when targets are met 鈥榯o improve the company鈥檚 share price鈥�

Jarvis said that because the incentive was a 鈥渙ne-off arrangement鈥�, it was not considered to be part of the company鈥檚 annual performance-related bonus scheme.

So far this year, Jarvis has lost a string of executives, including former chief operating officer Andrew Lezala and finance director Alistair Rae.

Jarvis鈥� latest attempt at survival comes a month after it implemented a 拢378m debt-for-equity swap. Since then shares have risen above 80p, compared with about 5p before the restructuring.

Despite the fact that the company announced a 拢354m loss for 2004, it now has a market capitalisation of about 拢120m.

Jarvis has also recommended that shareholders vote in favour of changes to the company鈥檚 existing share schemes 鈥渢o incentivise the employees who have remained loyal to the business and are essential to its continued recovery鈥�.

On Wednesday Jarvis announced that the deal to sell its highways maintenance business to Accord had fallen through.

In a statement to the stock exchange, it said that it had failed to agree a price for the business.

Jarvis will complete its contractual obligations within the highways business.