City grandee scoops £32m from Holland & Barrett owner as he cashes in after expelling sanctions-hit Russian founders
Windfall: Lord Davies (pictured with his wife, Lady Jeanne Davies)
A City giant has scooped £32m from the owner of Holland & Barrett after he ousted the sanctioned Russian founders.
Lord Davies – who was trade minister under Gordon Brown – took over the management of private equity firm Letter One after bosses were sanctioned following the invasion of Ukraine in February last year.
The Russian owners, including oligarchs Mikhail Fridman, Petr Aven, German Khan and Alexei Kuzmichev, were cut off from the group’s decision making, effectively freezing their shares and cutting dividends.
Fridman and Aven own nearly 50 percent of Letter One. At the time, Davies said he was staying on as chairman to protect the 120,000 jobs that Letter One supports through its investments, including at Holland & Barrett and ultra-fast broadband company Upp.
But documents have shown that the former banker was generously rewarded for this move.
According to the documents seen by the Financial Times, he was paid around £14 million for his work in 2022, including a £3 million ‘staff retention’ payment and a bonus, as well as his base salary and a contractual bonus.
He also received £18 million for 2021, which was paid out in 2022 due to sanctions-related delays. In contrast, the chairman of rival private equity firm Bridgepoint received £900,000 in 2022.
Letter One declined to comment on the specific amount given to Davies. But a spokesman said the board – including Davies as chairman and chief executive Jonathan Muir – had worked “tirelessly” in the difficult circumstances and ultimately “saved the company”.
But the group still has problems. In forthcoming accounts, net assets are expected to have fallen from £21.3bn in 2021 to around £16bn last year as the fallout from the war haunts the company.