Hughes and Bailey departed Photon with another $4m between them

Tim Hughes and Matthew Bailey – the architects of Photon Group’s rapid rise who left the organisation shortly before it hit the rails – both received more money from the company in their final year than in any other year.

The details are contained within Photon Group’s annual report which was released just before what was a public holiday in most of Australia.

Hughes, who stepped down as executive chairman, received remuneration in the 2009-2010 financial year amounting to $2.463m. This included a $1.12m termination payout.  

As Mumbrella has previously reported, Hughes’ payments from 2004 to 2009  amounted to $2.11m, meaning he received more in 2010 than in the rest of his time at the company put together. According to the report, 41% of the equity element of his remuneration was performance based.

In total, his tenure with the company delivered him remuneration of $4.6m.

Bailey, who departed at the start of 2010 saying the commute from Melbourne to Sydney was getting too demanding, received $1.658m in 2010. This included a termination payment of $895,000.Bailey had previously received $3.791m, meaning he received a total of $5.5m remuneration from Photon Group over the last six years.

Bailey was also fortunate enough to sell his family shares in the company for around $5m just before the share price crashed.

In the annual report, new CEO Jeremy Philips says that his main focus has been on delivering the company’s recapitalisation. He said: “I greatly regret the loss suffered by shareholders and appreciate the patience and support of our employees, shareholders, clients and other stakeholders.”

He also confirmed that more mergers lie ahead for Photon companies. he said: “When I joined on 1 June 2010 we had approximately 45 stand-alone business units. We will reduce that by at least 25% by the end of December 2010.”

The most high profile closure to date was Bellamy Hayden, which closed its doors on Friday with most staff moving to Naked CommunicationsAmong the most high profile agencies are BMF, BWM, Frank PR, CPR and Mark Communications.

The report also puts a price on the desperate efforts to reshape Photon before it was overwhelmed by debt – it cost  $28.4m including $13m in “closed business costs” and $2.9m in redundancy charges.

Payments to key executives are also featured in the report.

Nigel Long, MD of the strategic intelligence division, received $748,256.

Stewart Bailey, MD of the field marketing division, received $737,398.

Naked co-founder Jon Wilkins, MD of the integrated communications and digital division (although his role has since changed), received $669,464.

Philips, who joined late in the financial year, earned $174,753.

The annual report also offers signals as to the next potential crunch point to deal with Photon Group’s debt, much of which had been due at the end of last month before the recapitalisation kicked in.

The company has debts totalling $273m due over the next two years. The first deadline is the end of next March when around $39m becomes due. October 31 next year sees another $77m worth of debts become due. Another $38m becomes due in April 2012. The final $121m becomes due at the end of October 2012.

The company has so far drawn down $283m of its $316m credit lines, leaving it with a further $33m available. At the same time last year it had $83m available.

Photon’s shares fell as low as 8c on Friday night – about 20% down on the company’s 10c price when it returned to the ASX in August.At its peak nearly three years ago the company traded at almost $7.

At the close of trading on Monday night, shares had recovered fractionally to 8.4c, giving the company a market capitalisation of just $115.75m.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.