Calls for probe into £8.5m directors bonuses
29.10.07
Politicians and union leaders have called for an investigation into how two former Newcastle Airport directors were able to negotiate bonuses of over £8.5m. As reported last week, the airport is in dispute with the former directors, has not paid over all of the bonuses and is taking legal action against them to recover some or all of the amounts paid.
The size of the bonuses to the airport's former chief executive John Parkin, and former finance director Lars Friis, who died last year, have caused astonishment. Nick Brown, Minister for the North East and MP for Newcastle East & Wallsend, said: 'I don't understand how these arrangements were ever entered into. I'm genuinely shocked. I have never heard of anything like this in all my time in public life in the city.'
Graham Eastwood, regional industrial organiser for the T&G section of the Unite union, said: 'We are seeking a meeting with senior Newcastle Airport management. The questions we have posed to them are quite clear: we want to know how this was allowed to happen. We do not want to jeopardise the legal proceedings, but we are calling for an inquiry into this.'
It has been revealed that the bonus payments, totalling £8,547,000, were negotiated between the airport remuneration committee and the two individuals in 2006. They were linked with a deal to refinance the airport, which netted shareholders around £160 million to spend as the wished and both directors were heavily involved in the deal.
The airport is 51% owned by the district councils of Newcastle, Gateshead, Sunderland, North Tyneside, and South Tyneside, along with Northumberland and Durham county councils, and Copenhagen Airports has a 49% stake. However, it is a private limited company and so is not subject to any public regulatory body such as the Audit Commission, which means an inquiry is unlikely.
The airport says there are ongoing legal proceedings and it cannot comment further.
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