Newcastle Airport legal action over £8.5m director bonuses
26.10.07
Two directors at Newcastle Airport shared bonuses totaling more than £8.5m, the Newcastle Chronicle newspaper reports. One is the former chief executive John Parkin, who resigned in controversial circumstances and is now the boss at rival Leeds Bradford Airport, and the other is the former finance director Lars Friis who has since died.
The bonuses follow a re-financing deal that led to a dividend payout of about £160m to the airport's shareholders. Both Mr. Parkin and Mr. Friis were closely involved in negotiating the deal, which provided a windfall for the local councils who were free to spend the money as they pleased.
The airport's 2006 accounts are expected to reveal that 'one-off, exceptional bonuses' totaling£8,547,000 were payable to two directors in connection with the deal. However, the newspaper reports that not all of the money has been handed over, and the accounts will show that the airport is trying to retrieve it through legal action.
Mr. Parkin came to Newcastle Airport in 2002 after spending five years at Bristol as managing director. He was closely involved in the airport's expansion plans, overseeing the arrival of budget airlines like easyJet and also helping recruit the airport's the first scheduled long-haul service, the recently launched daily flights by Emirates to Dubai.
The biggest bonus is believed to have been payable to Mr. Parkin. He was suspended as chief executive of the airport in March, resigned in May and started his new job at Leeds Bradford last month. Legal action is being taken by the airport against him in connection with 'certain personal contractual issues'.
Councillors at the airport's seven local authority shareholders and local MPs have been advised not to comment on the affair whilst the legal action is in progress, but one senior councillor described bonuses of that size as 'obscene'.
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