TELECOMS group Cable & Wireless yesterday claimed it had the support of major investors over bonus plans that have reportedly raised corporate governance concerns.
The Association of British Insurers (ABI), which represents close to a fifth of UK shareholders, is said to be planning to issue a "red top" warning – its most serious alert – on recently announced changes to the group's long-term incentive scheme.
But C&W yesterday said it had a "broad level of support" for the proposals after consulting key shareholders.
The group unveiled plans last month to extend its existing bonus scheme by an extra year due to a delay to demerger plans amid market turbulence. John Pluthero, chairman of the Europe, Asia and US division, is picking up £8.3 million this year under the scheme, with further payments due next year and in 2011.
C&W also announced a new long-term bonus scheme for future payouts with a maximum payout and overhauled performance targets – a scheme that will not need shareholder approval at the annual general meeting on 17 July.
The ABI is reportedly considering a red top alert amid concerns the new scheme is changing the terms to allow the chance of higher payouts. While marking a U-turn on the current ability to pay unlimited bonuses, the incoming scheme will allow up to four times salary, based on pay rises due next year after a four-year pay freeze. The ABI declined to comment as it has yet to report back on C&W's proposals.
A C&W spokesman said: "We have undertaken extensive consultation with a large cross section of our leading shareholders and have received a broad level of support for our proposals."
The firm has courted controversy with its executive pay in recent years and was forced to defend itself against "fat cat" accusations at the 2007 AGM.
