Group Lotus boss Dany Bahar “committed” to securing the future of the Norfolk-based company and its workforce
Lotus boss Dany Bahar remains 'totally committed' to the Norfolk-based car maker and securing a future for the firm and it workers the company said today, as news emerged that the chief executive is entitled to a share of the proceeds of any sale.
There has been growing concern about the future of the iconic car maker following the sale of its parent company Proton to Malaysian car maker DRB-Hicom in January.
Fears have been mounting the DRB could seek a quick sale of Lotus with Chinese car maker China Youngman rumoured to be among those thought to be interested, which could see production pulled out of Norfolk.
As pressure has mounted to ensure that any deal keeps Lotus in Norfolk, prime minister David Cameron, who has held talks with his Malaysian counterpart over the issue, also confirmed he was keeping a close eye on the situation.
But DRB insisted at the weekend that it had not decided to sell the loss making car maker and was committed to supporting the existing management and the firm financially.
However it has announced that Proton chief finance officer Azhar bin Othman has been sent in to support the Lotus management and provide better linkage with Proton raising questions about to what degree DRB will press ahead with Mr Bahar's five year turnaround plan to produce four new Lotus models.
In December, a month before the Proton sale, Mr Bahar, who joined Lotus from Ferrari in October 2009, signed an extension to his contract.
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The 14-page contract, which has been seen by the EDP, shows that the Lotus boss is guaranteed a pay packet of at least �1.2m made up of an uncapped performance related bonus and a �600,000 gross basic salary.
The contract also notes that Mr Bahar will also be entitled to a further payment upon any sale of listing of Group Lotus worth 5pc of the enterprise value, or allocated shares worth the same amount.
A Lotus spokesman said the company would not be commenting on the contract.
'We don't comment on contractual details, but what we can say is, that Dany Bahar remains totally committed to Lotus and his over-riding priority is securing the future of the company and protecting its employees'.
However one corporate lawyer told the EDP that such contracts were not uncommon at the boardroom level and served a dual purpose of retaining chief executives and incentivising them to improve the business.
Greg Allan, a senior associate at Birketts in Norwich, said: 'They are quite common. They encourage people to stay and also to come in and do a good job. It means if you do a good job and you sell, you get some value out of that. It is also often critical to a sale process that the chief executive stays on board.
'I can think of many businesses where chief executives and others have come in and have been offered shares,' he added.