`Fat cat' bonuses shunned by AEA

Directors of AEA Technology, the recently privatised research and contracting arm of the Atomic Energy Authority, yesterday insisted they would receive no "fat cat" bonuses from the jump of almost 40 per cent in the share price since the sell-off.

Sir Anthony Cleaver, the chairman, said though executives were eligible for annual bonuses of up to 40 per cent of basic pay these would be based on profits performance rather than the increase in the share price.

AEA Technology shares, which were not sold to small investors, were priced at 280p but surged by 15 per cent on the first day of trading at the end of September. They closed yesterday at 389p, an increase of 1.5p on the day, making a huge rise of 39 per cent since the flotation.

Sir Anthony also insisted the taxpayer had got a good deal from the pounds 224m sell-off, despite the subsequent increase in the share price. "I can't think of people at the time saying the offer was underpriced," he said.

In the weeks before privatisation the company had given a "cast-iron guarantee" that there would be no "fat cattery". Peter Watson, the chief executive, is also chairman of the rail leasing company Porterbrook and stands to net pounds 4m from its takeover by Stagecoach.

AEA Technology yesterday revealed a 77 per cent drop in first-half pre- tax profits from pounds 5.3m to pounds 1.2m.

The executive bonus payments would be based on the 18.5 per cent increase in operating profits to pounds 6.4m.