Hitting pay dirt

3 March 2003 By Hugo Dixon Follow @hugodixon

That s what the entrepreneur and his team would make if they can deliver 20% a year growth in SixCon s share price That may look tough. But even at 10% a year, they would cream off over £400m. This is greedy.

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Breakingviews has produced a calculator allowing you to work out what Osmond would make under different scenarios. Email newseditor@breakingviews.com

CMI has devised a complicated incentive structure for Osmond and his senior management. This has five elements, several of them involving Sun Capital – another Osmond vehicle.

• Sun will receive 1% of any value returned to SixCon shareholders in excess of £700m –subject to SixCon's adjusted value exceeding 692p a share after 2006 results are produced.

• If the value returned is over £2.6bn, Sun will receive 20% of the upside above 692p. It will also get 244m new CMI shares. Finally, it will receive the equivalent of 2% of value returned above £700m rather than 1%.

• Sun will receive an advisory fee of £22m payable in CMI shares if the SixCon deal is completed.

• CMI shareholders will receive a scrip dividend of 235m new CMI shares if the deal is completed. Osmond and other CMI directors own about 25.5% of CMI.

• Certain individuals including members of the CMI board will exercise warrants giving them 28m new CMI shares.

The value returned to shareholders will include all cash and securities returned to CMI shareholders whether by way of dividends, cash or buybacks. The adjusted share price will be struck after adding back the value returned.

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