Big payouts for lottery chiefs

Lottery ticket sales fell 2% last year to £4.9bn

National Lottery operator Camelot has unveiled substantial bonuses for its directors, despite falling ticket sales.

In its latest annual report, the operator said senior staff were being rewarded for helping Camelot win its new licence, and for remaining loyal to the company during that period.

Overall lottery sales fell by 2.1%, to £4.98bn, for the year ending 31 March 2001, but the operator's wage bill rose by nearly 50%, to £39.4m.

That is partly because of hefty pay rises for directors, who received a total of £3.7m.

Camelot has been trying to shed the "fat cat" label that dogged it - and the lottery - after Labour ministers gave its directors an angry dressing down for their bonuses and profits.

Loyalty bonus

There had been indications that Camelot would not be as generous to Dianne Thompson, its chief executive, as it was to her predecessor.

But the report reveals that Ms Thompson earned a total of £870,000 during the year, more than twice the total payout to Tim Holley, whom she succeeded in February.

The generosity is reportedly linked to Camelot's battle to retain its licence, which involved a bitter scrap with Sir Richard Branson's People's Lottery.

The total cost of Camelot's licence battle was £12m, the report showed.

More than two-thirds of this money went on staff bonuses.

Loyal to the lottery

Camelot's shareholders reworked its bonus scheme, following a review in 1997, and introduced new loyalty payments to stop staff being poached by rivals or leaving early, in the event of it losing the licence.

The payments are on top of the existing performance bonuses - but Camelot said they were necessary, a one-off, and do not come out of the fund for good causes.

Earlier this year the lottery regulator announced that the lottery could raise £5bn less for good causes in coming years than Camelot had pledged.

When bidding began last year for the next seven-year licence to run the lottery, both Camelot and Richard Branson's People's Lottery predicted they would raise £15bn for good causes.

But the regulator said the amount raised could fall £5bn short.

On the defensive

Camelot chairman Sir George Russell defended the bonus programme.

"Shareholders have since 1997 planned provision for the use of their own funds to meet commitments under the scheme which both I, and the shareholders, accepted as legitimate costs for bidding and winning the second licence," he said.

"This scheme is not based on annual sales. All old schemes have now ended and the performance based payments detailed are the last under the present scheme."

He also promised to cap future rises.

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