UK lottery chief wins big payout

LONDON, England -- Directors of Britain's National Lottery operator Camelot have been given dramatically increased payouts this year -- despite falling ticket sales and profits.

Chief executive Dianne Thompson, Camelot's highest paid director, received a pay rise of £38,781 ($55,379) over the year, from £196,333 ($280,360) in 2000 to £235,114 ($335,738) in 2001.

Her total payout for 2001 amounts to £870,000 ($1,242,343), more than twice the total annual payout in the year 2000 to her predecessor Tim Holley, who resigned on February 1 this year.

The company's annual report came on the day of a survey revealing that British CEOs are the highest rewarded in Europe, prompting criticism of payments to directors.

ANALYSIS British executives top Europe's pay league

It showed pre-tax profits fell 12 percent to £49 million ($70m) for the year ended March 31, while payouts to directors reached nearly £3.7 million ($5.3m).

Full sales for the year, at £4,983 million ($7,115m), were down 2.1 percent on the previous year.

Camelot blamed the poor results in part on the £12 million ($17m) it spent on its campaign to win a second lottery licence after a hard-fought battle against Richard Branson's People's Lottery.

But the report also revealed a £70 million ($100m) payout to the consortium's main shareholders, a dramatic rise from the £21.2 million ($30.3m) it paid out a year earlier.

Camelot said a new scheme was developed by its remuneration committee on behalf of the shareholders following a review of bonus payments for staff in 1997.

It was designed to reward all staff for loyalty and success in winning a second licence and address staffing level concerns as the franchise drew to a close. This cost £8.7 million ($12.4m).

Employees, including directors, were paid a total of £39.4 million ($56.3m) this year, compared with £26.7 million ($38.1m) in 2000, including wages, social security costs and pensions.

But each executive director received a "win" bonus during the year following the award of the second licence, with the amount paid based on each director's notice period.

The total "win" bonuses paid was just over £1 million ($1.4m), the report showed. Chairman Sir George Russell whose pay, at £75,000 ($107,000), did not rise, said of the staff loyalty scheme: "The scheme means that total employee costs, including director's emoluments, are higher than last year.

"Loyalty payments under the scheme ensured key directors and staff stayed in post until the end of the first licence.

"From 2001 onwards, all incentive based rewards are limited to a maximum of 25 percent of salary for all staff, including directors," he added.

A breakdown of Thompson's total payouts for the year were: salary £235,114 ($335,738), compared with £196,333 ($280,360) last year.

Pension contributions were £50,124 ($71,576), compared to £43,788 ($62,528) last year. Benefits excluding pension contributions were £14,559 ($20,790) compared with £14,013 ($20,020) in 2000 and total bonuses of £600,640 ($857,702), compared with £49,400 in 2000.

Camelot said it was on course to raise £10.5 billion ($15bn) for good causes by the end of the current seven-year licence period in September, well short of an earlier pledge to raise £15 billion ($21.4bn). The group blamed the shortfall on falling ticket sales.

Camelot is jointly owned by The Post Office, which has changed its name to Consignia, soft drinks and confectionary group Cadbury Schweppes, Racal electronics, a division of France's Thales, Fujitsu unit ICL and De La Rue.