Mr Stewart Kenny, the chief executive of Power Leisure has received options worth #1.2 million on top of the #2.6 million in cash he is expected to raise when the bookmaker floats next month.

The pathfinder prospectus for the flotation shows that Mr Kenny (49) has been given options over 720,000 shares exercisable at #1.16 per share while Mr John O'Reilly (50), the head of the group's online betting division has been given options over 900,000 shares at the same price. Power Leisure is expected to float at between #2.30 and #2.85 per share.

If the upper target is reached the two directors options will be "in the money" to the extent of #1.2 million and #1.52 million respectively, although they will not be able to start cashing them in until May 2003.

The options have been paid for by the existing shareholders. As a result investors coming on board as part of the #117 million flotation will not have to bear the cost, according to Mr Peter O'Grady Walsh, the company's finance director.

Mr O'Grady Walsh said all employees who have more than three years' service will get between #1,270 and #2,500 of free shares. This scheme will cost the existing shareholders up to #950,000, he said.

The company has also set up a Sharesave scheme to allow employees who have been with the company for more than one year buy shares.

Mr Kenny was one of the founders of Power Leisure which trades as Paddy Power.

He merged his firm of Kenny O'Reilly with two other bookmakers - P Corcoran and part of Richard Power - in 1988 to form Paddy Power. He currently owns 10 per cent of the company but will be selling up to one fifth of his #12.6 million in the flotation raising #2.6 million.

The details of Mr Kenny's remuneration are disclosed in the prospectus. He has a one year rolling contract that pays an annual salary of #203,000 plus bonus and benefits including a car.

Mr O'Reilly, who will head up the company's critical drive into Internet and on-line betting earns a basic salary of #167,000. Mr O'Grady Walsh, who is on a one-year fixed contract of £200,000 a year, owns 996,000 shares (2.2 per cent of the company). Mr O'Grady Walsh, a former executive with NCB, also provides corporate finance advice to Power Leisure.