Cadbury Schweppes is introducing a golden parachute clause to
ensure that its top directors are compensated in the event of a takeover.
The “change of control” clause will be included in the group’s
annual report, which is being sent to investors this week. It is understood to
have been approved by the group’s ten largest institutional investors.
Under the new plan, directors will be paid twice the total
remuneration. This includes basic salary, annual incentive, long-term incentive
plan and other allowances.
If Cadbury was acquired by a hostile bidder, then its chief executive
would receive £3.12m compared to £535,000 under the old agreement.
The Government is paying close attention to boardroom pay
with trade and industry secretary Stephen Byers calling for more detailed
reporting of director’s pay this month.