Telecom Eireann chief executive Mr Alfie Kane has a basic annual salary of £300,000 a year (€380,700), the detailed prospectus for the company's flotation reveals.
The 256-page prospectus, which is the base document for the roadshow to 150 institutional investors over the next few weeks, goes into an extraordinary level of detail on Telecom's finances and business, detail that institutions demand when they are deciding whether to subscribe to a public offering of shares.
On management remuneration, the prospectus discloses that other than his £300,000 a year basic salary, Mr Kane is entitled to an unspecified annual bonus as well as a long-term incentive payment covering the period from April 1998 to April 2000.
Within 90 days of the flotation, the Telecom board's remuneration committee will consider a long-term incentive arrangement for Mr Kane for the period beyond April 2000.
Mr Kane's contract with Telecom also includes a clause where, in the event of Telecom being taken over, he can give 90 days' notice and receive one year's salary.
The only other remuneration details in the prospectus are for recently-appointed chief financial officer Mr Malcolm Fallen, who is on a basic salary of just under £250,000 (€317,250) as well as a guaranteed bonus of not less than 25 per cent of his basic salary for the year to April 2000. This indicates that Mr Fallen's guaranteed bonus for the current year will be at least £62,500. From next year, Mr Fallen's bonus will be at the discretion of the remuneration committee.
Telecom senior management other than Mr Kane will also benefit from a long-term incentive scheme introduced in 1997 which provides for a cash payment in April 2000 of a maximum of 30 per cent of salary.
The prospectus also provides additional detail on the commissions that AIB Capital Markets and Merrill Lynch will earn for the share offering.
On the retail side of the flotation, which will see a minimum of 40 per cent and potentially as much as 60 per cent of the Government shares sold to private investors, AIB and Merrill Lynch will receive a commission of between 1.4 per cent and 1.8 per cent of the value of the retail offering.
The commission paid will be linked to the exact level of takeup, but if 60 per cent of the Government's shares are sold to retail investors - 648 million shares - at the upper end of the price range (£3.27 a share), then AIB and Merrill Lynch could share commissions of at least £29 million and potentially as much as £38 million.
This would, however, be substantially reduced by the commissions paid to Irish stockbrokers who directly apply for shares on their clients' behalf. Irish stockbrokers, however, who register their private clients for Telecom shares, will receive a commission of 0.25 per cent which will be deducted from the commission that would otherwise be paid to the global co-ordinators, AIB and Merrill Lynch.
In addition, the six international banks involved in the institutional share offering - a minimum of 432 million shares - will receive a commission of 2 per cent. The six banks are AIB, Merrill Lynch, ABN AMRO Rothschild, Kleinwort Benson, Morgan Stanley and Paribas. If the 432 million shares guaranteed for institutions are sold at the £3.27 top of the range, then the six banks would share commissions of almost £31 million.
