Investor revolt at Cable & Wireless

From Today's Observer. Looks like it could be a close vote.

C&W faces rebellion on windfalls for executives


Oliver Morgan
Sunday July 15, 2007
The Observer


Cable and Wireless is facing a major rebellion by shareholders over executive pay at its annual general meeting this week.

The Association of British Insurers has warned companies that they cannot expect support for controversial executive pay packages similar to that proposed by Cable and Wireless even if the scheme is voted through at its AGM.

Investors are expected to give C&W chairman Richard Lapthorne a rough ride at Friday's meeting and to vote against the company's pay scheme in large numbers.

The scheme was updated last month, introducing measures that could see Lapthorne pocket £11m over three years as part of an incentive scheme. Investors are also concerned at the removal of a £20m cap on arrangements for chief executive John Pluthero and international business head Harris Jones.

Last year the package was passed by investors only after the cap had been put in place. Pirc, the corporate governance body, said the company was removing a commitment it had given to ensure shareholder support last year, and would therefore advise investors to vote against the remuneration report at the AGM.

A Pirc spokeswoman said: 'We have concerns about the targets and about the level of reward with the cap in place, so the fact that it has been removed exacerbates that concern.'

Peter Montagnon, head of investment affairs at the Association of British Insurers, said: 'Other companies should not assume that, even if C&W wins the vote, they will receive support from investors if they propose similar schemes.

A spokesman for C&W said the company had carried out extensive consultation with major shareholders and the ABI.