Glasgow Investment Managers chief executive Mike Balfour netted a £109,000 profit from its takeover by Aberdeen Asset Management last year thanks to an unusal share option arrangement, it emerged yesterday.

Balfour is thought to have attempted a management buy-out of the company controlled by founder David Williams but was outbid by the north-east company.

Accounts obtained by The Herald from Companies House reveal that on August 21, 2007, the day before Aberdeen's takeover was announced, Balfour was granted options over 4375 shares that he could exercise at £75.

He did this on August 24, immediately before Aberdeen formally acquired the company in a £6.25m offer that valued the shares at £96 each, reaping him a profit of £109,375.

On top of this, assuming he was the firm's highest- paid director, Balfour was paid £364,000 in the six months to September 30, 2007, compared to £379,000 for the full year to March 31, 2007.

He could also have been a beneficiary of £60,000 paid by GIM in compensation for loss of office to departing directors, who included Balfour and finance director Michael Carney.

The accounts reveal that GIM made a £116,000 pre-tax profit in the year ended March 31, 2007. It dropped to a £558,000 loss for the next six-month period to September 30 due to the impact of the share options and severance payments to senior management.

Glasgow also paid an interim dividend of £1.25m during the final period. This went to 50.1% shareholder Sutherland Holdings, majority owned by Williams, in which head of the investment team Iain Lynn also had a stake, and minority investor GIM's Shires Income investment trust.

Balfour previously received compensation of £259,000 after being ousted as chief investment officer of turbulent Edinburgh Fund Managers in 2001. He was brought in by Williams to run GIM on his retirement in 2004.

Balfour did not reply to requests for comment. Aberdeen Asset Management declined to comment.