A new management team for Rentokil Initial, the support services company, is in line for a bumper reward package of shares worth up to £95 million if it succeeds in more than tripling the group’s share price to 280p in the next five years.

Rentokil announced yesterday that John McAdam, chief executive of ICI until its takeover by the Dutch chemicals group Akzo Nobel last year, is to become its chairman in May. He brings with him Alan Brown, ICI’s chief financial officer for the past two years, as chief executive and Andy Ransom, ICI’s head of mergers and acquisitions, who will have boardroom responsibility for corporate development.

Shares in Rentokil rose by as much as a quarter at one point, to reach 92p, as investors welcomed the new team. In December, before Rentokil issued the first of two recent profit warnings, its shares were trading at 146p.

The company yesterday confirmed that Brian McGowan, chairman for four years, and Doug Flynn, the chief executive who had tried to put the struggling business back on an even keel since 2005, had resigned with immediate effect. Mr Flynn will leave with £1.2 million.

The new executives have been lured by a generous incentive scheme that will award shares worth £13.5 million if the share price rises to at least 180p after three years. It will begin to pay out when the shares hit 120p, although only a fifth of the shares will vest, potentially worth £1.8 million. A further award, worth up to £10.5 million, would be paid if the shares hit the next target of 280p within five years.

If the three executives hold all their shares until the share price reaches 280p for a sustained period of 60 days, each person would make £31.5 million from the share package – on top of pay and regular bonuses.

The incentive package has been discussed with large shareholders who reportedly gave it their backing, but is still set to be voted on at the annual meeting in May, when it is likely to revive arguments about pay deals in the private equity style. In 2005, Sir Gerry Robinson, the former Granada chairman, sought management control of Rentokil, demanding personal remuneration of about £75 million. However, most big shareholders balked at his US-style pay demands and refused to back his bid approach.

Peter Long, the senior independent director of Rentokil, who was responsible for bringing in Dr McAdam and his team, yesterday pledged that the business would not be broken up and sold at knockdown prices to “bottom feeders” from the private equity world.

Mr Long said his three recruits were committed to the support services business for the long term and the board had seized a unique opportunity to appoint this skilled team. “I’m not interested in talking to bottom feeders who think that they can buy some of the parts of Rentokil on the cheap,” he said.

Rentokil has been the subject of break-up speculation since it issued two profit warnings in December and February, but Mr Long said that there had been no formal approach by private equity buyers for any of the business, althought he believed that some potential buyers had been looking at the group with a view to making an approach.

The company’s troubles stem from difficulties in City Link, its parcel delivery business. Mr Long said the problems arose from the “botched” integration, by Mr Flynn, of Target Express with City Link. In lieu of notice, Mr Flynn will receive his contractual entitlement of his salary, his pension and certain benefits – a package that is valued at £1.2 million. Mr Long said that the company was obliged to honour Mr Flynn’s contract and that this was in no way a reward for failure.

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