This column has been critical of the Jones Group in the past, and certainly shareholders have had little reason to be cheerful about their investment in the company until the recent decision to sell off a load of assets and hand dollops of cash back to shareholders through an £18.3 million buyback.
It has to be said that the current management headed by Pat Nevin and Jim McLoughlin has done a pretty good job in selling off the shipping and manufacturing businesses and the £18.3 million being given back to shareholders is an awful lot more than the £12 million estimate when the company first mooted the idea last year.
Mind you, Mr Nevin and Mr McLoughlin have had a vested interest in getting as much as possible for the shipping and manufacturing businesses, apart altogether from their fiduciary duty to get the best deal possible for Jones's long-suffering shareholders.
Apart from his £115,000 salary, Pat Nevin also had a bonus arrangement tied in directly with how much was realised from the sale of the assets. His bonus scheme entitled him to a £100,000 bonus as well 5 per cent of the cash realised from the disposals in excess of £13.6 million.
The difference between £18.3 million and £13.6 million is £4.7 million so Mr Nevin stands to get an additional £235,000 bonus for his endeavours in getting the most money for the assets being sold.
Finance director, Jim McLouglin, had a similar bonus arrangement on top of his £90,000 salary, although his flat bonus was £67,000 plus 3.3 per cent of the excess cash realised over £13.6 million. On this basis, his additional bonus is over £155,000. Nice going for the two Jones executives, but on this occasion the payouts seem well-merited shareholders are getting a lot more money back than they might have otherwise expected.
The only question still to be answered is the future of Jones as a public company. A small distribution business and a market capitalisation of £12 million is unlikely to be enough to keep Jones independent and a bid for the oil distribution and Blugas businesses seems likely.
