Dunlop Haywards’ former chief executive Bob Dyson has finished giving evidence at the High Court in a dispute brought by former managing director David Kahn concerning an alleged £400,000 bonus.
Dyson was the main witness for Dunlop Haywards against Kahn’s claim that a March 2005 agreement between the two men entitles him to a £400,000 bonus for that financial year.
Kahn claims that the agreement was reached after Dunlop Haywards became concerned that he would leave the firm in order to take up a £200,000 chief executive role at an AIM-listed company.
Kahn is claiming that Dyson agreed to give him a special referral bonus in addition to his standard bonus as a reward for his “exceptional ability” to generate business for other departments – in particular, the
The agreement stated that “for business generation/referrals the net fees to [Kahn] over £150,000 [should be split] 50:50 David Kahn/Dunlop Haywards”.
The dispute centres on what “net fees to [Kahn] over £150,000” means.
Kahn claims that it means that all fees attributable to his referrals above the threshold of £150,000 must be split 50:50 between him and the company.
Dunlop Haywards, on the other hand, contends that it means that only when the standard scheme split of 70:30 between the company and employee had been applied to a fee would the resulting amount go towards the threshold target. Only when that target had been met would the excess be split 50:50.
Kahn claims that, under Dunlop Haywards’ interpretation, a bonus would be unachievable and the scheme would be pointless. Dunlop Haywards, however, argues that Kahn’s interpretation would be uneconomic for the company.
In evidence, Dyson denied that he had come to the agreement as interpreted by Kahn, adding that had he gone to Erinaceous’ board with such a bonus strategy they would have “questioned my sanity”.
The case continues.
