Ex-Labour minister lands £32m windfall after Russians ousted

Windfall: Lord Davies (pictured with his wife, Lady Jeanne Davies)

A City grandee has scooped £32m from Holland & Barrett’s owner as he cashes in after ousting its sanction-hit Russian founders.

Lord Davies – who served as a minister for trade under Gordon Brown – took over the running of the private equity firm Letter One after its 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, with their shares effectively frozen and dividends stopped.

Fridman and Aven own nearly 50 per cent 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 venture Upp.

But documents have revealed that the former banker has been generously rewarded for this move.

He has received about £14m for his work in 2022, according to the documents seen by the Financial Times, including a £3m ‘staff retention’ payment and a bonus, as well as his base salary and a contractual bonus. 

He also received £18m for 2021, which was paid out in 2022 because of sanction-related delays. By contrast, the chairman at rival private equity firm Bridgepoint was paid £900,000 in 2022.

Letter One refused to comment on the specific sum 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 business’.

But the group still faces trouble. In upcoming accounts, net assets are expected to have fallen from £21.3billion in 2021 to about £16billion last year as the fall-out from the war haunts the firm.