Johnston Press, the debt-laden publisher of the Scotsman and Yorkshire Post newspapers, is to revamp its £1.5m incentive scheme for new chief executive John Fry after falls in the stock market made pay-outs virtually unattainable.

JOHNSTON Press, the debt-laden publisher of the Scotsman and Yorkshire Post newspapers, is to revamp its £1.5m incentive scheme for new chief executive John Fry after falls in the stock market made pay-outs virtually unattainable.

The company's annual report reveals that it agreed to award Fry £1.5m of shares when he joined on January 5. At the time he signed his contract in September Johnston Press shares were trading at around 43.825p, resulting in him getting 3,422,703 shares.

Under the long-term incentive plan (LTIP) these were to be released as he met share price targets. The first 30% was to vest when Johnston Press shares reached 68.825p and he was to receive further tranches within a three-year period until the shares reached 243.825p.

However, the company's shares plummeted rapidly after September and, despite a bump in the past few days as rumours circulated that it could sell The Scotsman, they closed at just 6.75p yesterday.

The company said: "Since the terms of the LTIP were approved by the (remuneration) committee, the company's share price has continued to fall and the company has received feedback on the plan from shareholders. As a result the committee has decided that the proposed LTIP is no longer fit for purpose and it is impractical to implement."

It added: "An alternative LTIP is currently being considered by the committee. It will consult with major shareholders before the terms are finalised and any award is granted. The committee will seek full shareholder approval if required."

Fry's incentive scheme, which would also pay out if the company was taken over, is in addition to a £525,000 annual salary. This is topped up with a payment into his private pension equivalent to 30% of salary which this year amounts to £157,500. The payment will increase every year by 125 basis points to a maximum of 40%.

Fry joined Johnston Press on January 5 from rival Archant where he was chief executive.

Johnston Press, which has a stable of more than 300 daily and weekly newspapers, is also still paying former chief executive Tim Bowdler it was further revealed yesterday even though he stepped down as a director at the end of 2008. In return for consultancy work, Bowdler will receive a £573,000 annual salary, the same as he earned last year, until he formally retires on May 16. However, he will not receive bonuses. Bowdler became chairman of PA Group, owner of the Press Association news agency, in January.

The Edinburgh-based firm further agreed to pay a £250,000 retention bonus to chief financial officer Stuart Paterson if he stays with the company until January 5, 2011.

Paterson's salary has been frozen at £361,000 for 2009. He gets a contribution equivalent to 25% of his salary into a private pension.

Last year he also received a share allocation worth 100% of his salary under Johnston Press's performance share plan but would have to meet targets based on share price performance and returns on capital over the next three years making any vesting of the shares unlikely, the company indicated yesterday.

Johnston Press said in the report: "In 2009 it is expected that the level of award as a percentage of salary will be sig- nificantly lower than in 2008".

None of the company's direc tors received performance-related bonuses for the year.