Lottery chiefs on a roll for more bonuses in pipeline for Lottery chiefs

Camelot was embroiled in a new fat-cat row last night after it admitted that its directors were heading for another two bonuses this year, despite bringing in less money for good causes.

The National Lottery organiser told The Independent that its top executives would be paid 43 per cent of their salaries as bonuses next month, with a further 35 per cent to follow in October, for their performances in the year ending March 1997 - a year in which profits fell from pounds 51.1m to pounds 46.8m.

The Government reacted with fury yesterday to the news that directors' pay increased by an average 40 per cent last year - in one case 90 per cent - when leaked figures showed the company's contribution to good causes was set to fall from pounds 1.416bn to pounds 1.272bn.

Camelot countered that the big pay rises included bonuses based on its performance in 1995-96, when sales topped pounds 4.7bn. The bonuses, it said, were paid last June - a year in arrears - but were in recognition of the success of that year.

However, when pressed over the bonuses to come in June for the poorer performance in 1996-97, a company spokeswoman said they would amount to 43 per cent. That, she said, was down from 50 per cent in recognition of the lower profits. "We were set targets independently shortly after winning the franchise," she said. "These bonuses relate to those targets."

A remuneration committee, comprising Jeremy Marshall, chief executive of shareholders De la Rue; Jim Butler, 68, a former senior partner at accountants KPMG Peat Marwick; and Mary Baker, 60, wife of Kenneth Baker, the former home secretary, was responsible for determining pay and bonuses, the spokeswoman said.

The revelations are likely to make for a stormy meeting on Monday between Chris Smith, Secretary of State for National Heritage, and Sir George Russell, chairman of Camelot. So incensed was Mr Smith by last year's pay rises that he summoned Mr Russell to his office yesterday. However, Mr Russell is in Canada and is now expected to attend on Monday.

A spokesman for the Department of National Heritage said Mr Smith had been unaware of the latest set of bonuses before he warned that he was considering terminating Camelot's contract to run the lottery before it runs out in 2001.

"I am going to say very clearly [at the meeting] that the very key message that the National Lottery is for the prizewinners and for the good causes," Mr Smith said. "It is not for profiteering. I am very angry indeed."

Camelot said directors' pay had been independently assessed and was in line with the market rate. Last year, David Rigg, communications director, was given a 90 per cent pay rise, from pounds 175,000 to pounds 333,000; Tim Holley, chief executive, received a 53 per cent increase to pounds 590,000; David Clark, director of operations, got a 42.8 per cent rise to pounds 347,000; and Peter Murphy, who deals with legal matters, tax and payouts, saw his pay rise by 76 per cent to pounds 361,000.

Paul Vallely, page 19