Cable & Wireless Communications suffered a rebuke from shareholders on executive pay when more than a fifth of votes went against the remuneration report at the telecommunications group’s annual meeting.
About 21.1 per cent of votes cast went against the remuneration report, which includes plans to raise the salary of chief executive Tony Rice by 17 per cent to $1.1m (£726,000) in 2010-11.
He could also receive cash and share bonuses each worth up to $825,000 in 2010-11, depending on the company’s performance.
C&W Communications, which provides telecoms services in locations ranging from the Caribbean to Macau, was demerged from Cable & Wireless’s corporate business in March. The company is chaired by Sir Richard Lapthorne.
The vote reveals a substantial minority of shareholders remain unhappy with the company’s remuneration practices. A controversial incentive plan paid out £32m to senior managers of the combined business last year.
Cable & Wireless Communications’ remuneration committee has argued the new package takes Mr Rice’s pay to a competitive market rate but the Association of British Insurers this month raised concerns over remuneration practices.
The ABI issued an “amber top” recommendation, expressing concern about performance share awards based on total shareholder return. The ABI felt that the measure did not necessarily align reward with performance because it is based on factors that are largely outside the management’s control.
“Our remuneration arrangements are based on a lower risk reward structure than was previously the case at Cable & Wireless. It is focused on delivering value and is strongly aligned with the interests of shareholders,” said Cable & Wireless Communications.
Both Cable & Wireless Communications and Cable & Wireless Worldwide, the corporate business that on Tuesday unveiled a profits warning, held annual meetings on Wednesday.
At Cable & Wireless Worldwide, 6.8 per cent of votes cast went against the remuneration report.
Cable & Wireless Communications said on Wednesday that it had started the year well, with improving conditions in Macau and the Maldives offsetting continuing softness in its Caribbean markets. Its shares closed up 1.8p at 57¾p.
Shares in Cable & Wireless Worldwide closed 3.3p lower at 65.7p in the wake of its profit warning.
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