Two top First Active executives earn €1.274m

FIRST ACTIVE’S top two executives walked away with a cool 1.274 million in salaries and bonuses in 2002.

Chief executive Cormac McCarthy’s total package came to €682,000 for the year, while his deputy Michael Torpey was rewarded with a remuneration package of €592,000 for the year.

Mr McCarthy’s basic salary was €350,000 topped up by a substantial bonus of €196,000 for the year. Pension payments added another €112,000 and the entire package was rounded off with a benefit in kind allocation €24,000. In 2001, Mr McCarthy’s total package amounted to €489,000, significantly less than his deputy. In that year, Torpey came out on top with total earnings of €550,000.

His gain in 2002 was much more modest, rising to €592,000 in all.

That comprised salary of €305,000, a €171,000 bonus and a pension allocation of €98,000 rounded off with estimated benefit in kind gains of €18,000 over the period. Shareholders, casting greedy eyes at the generous payments, can take heart, however.

They are to benefit from €160 million capital repayments later in the year. In the current newsletter sent to shareholders in recent days, they have been informed that their cash bonanza will most likely be paid on the same day as their final dividend in June 2003. In the bulletin, shareholders are warned to be wary of their tax position in the run-up to the capital repayment.

Capital gains tax will apply to those holding more than 1,130 shares in the company. And shareholders have been advised to consult their broker or financial adviser before adding to their share portfolio in the months ahead.

Provided shareholders have no other capital gains this year and their stake is less than 1,130 shares there will be no liability because the first 1,270 earned is exempt.

Shareholders will be asked to approve the capital repayment at the AGM on March 27. Once approved, the company will take the matter to the High Court for clearance. Once there are no delays, First Active chairman John Callaghan says shareholders can look forward to their cash bonanza being paid in June along with the final dividend.

Shareholders could also be due a further bonanza before long. At the end of October, the five-year moratorium on bids ends and First Active is expected to be taken over.

Irish Life & Permanent is thought to be the most likely buyers, though Anglo Irish Bank has not been discounted. Shareholders will gain either through a generous share allocation in the enlarged company or by being bought out.