Tomkins chief gets US-style package

Tomkins, the conglomerate that became a byword for corporate excess, has ended its protracted search for a new boss by offering a Canadian lawyer turned motor-components executive a £25m incentive to get the business motoring again.

The engineering group announced yesterday that it has appointed Jim Nicol, former head of a $10bn-a-year turnover components business, to replace Greg Hutchings, who resigned as chief executive in acrimonious circumstances in October 2000.

It has come up with a US-style salary, bonus and share option package to lure him to the Tomkins head office in Putney, London after failing to unearth a UK executive it believed was up to the job. The package could be worth up to £25m over the next three years, depending on the company's share price performance.

Tomkins, which makes around 80% of its profits in the US, the bulk of it in the industrial and automotive sector, said yesterday it had interviewed 30 to 40 people for the vacant post but had not found anyone "with the right skill set" to run the business. It had been courting Mr Nicol since last summer.

"We are in a very special situation here," said a Tomkins spokesman. "All our businesses are headquartered out of the US and we make 70% of our sales there. We were after someone to run these businesses who had the right balance of skills. There was nobody in the UK so we had to go to the north American market."

Mr Nicol, 47, was until recently president and chief operating officer officer of Magna International, an Ontario based motor component manufacturer employing some 63,000 people.

As Tomkins chief executive he will be paid £750,000 a year with the possibility of earning a maximum bonus of the same amount based on as yet undisclosed performance criteria.

A further one-off payment of £840,000 will also be paid over the next three years but Mr Nicol could boost his remuneration by millions as a result of potentially lucrative share option arrangements.

As part of the agreement he will buy £2m worth of Tomkins stock with his own money which the company has guaranteed to match on a one for one basis. That would rise to a three to one match in the event of the share price trebling over the next three years and could be worth a maximum £18m.

Tomkins said the package was geared in terms of performance and was designed to give the new chief executive an incentive to get the business moving.

"It is less than he was on at Magna and would be in the lower quartile in the US," the spokesman said. "If shareholders have any concerns they will raise them with us but we have not had any as of today. To get those sort of figures the share price will have to treble in three years which would be some going.

Tomkins chairman David Newlands, who recently announced 1,000 job cuts following a 16% fall in first half operating profits, said: "He has an extremely strong industrial and manufacturing track record, has excellent contacts within all areas of the automobile manufacturing world and has demonstrated a proven ability to create value for companies and their shareholders."