Arun Sarin, the chief executive of Vodafone, received increases in his salary and bonus awards last year which take his package above £5m ($9m), despite the turbulent performance which led the mobile group to a record loss.
His basic salary rose 7 per cent to £1.25m for the 12 months to March. He was also awarded shares worth £1.42m through a short-term incentive plan, up about 24 per cent on 2005 despite Vodafone’s £14.9bn loss for the period and its underperformance against its stock market peers.
Vodafone’s annual report has been keenly awaited by its shareholders, who have been buffeted over the past few months by reports of boardroom rifts and downgrades in earnings forecasts as Mr Sarin admitted Vodafone was entering an era of lower growth.
Mr Sarin, who set a new strategy last month, was also awarded shares worth £2.49m as part of a long-term incentive plan, slightly above the 2005 award. The shares will vest in full only if Vodafone’s total shareholder returns are in the top 20 per cent of its peer group over the next three years.
The company pointed out that, because of its past underperformance, previous grants vesting this year would be worth less than had been expected. A spokesman also noted that Mr Sarin had chosen to take his short-term bonus in shares rather than cash.
Mr Sarin was also granted 5.7m share options, with a weighted average exercise price of 145?p ? well above Vodafone?s current share price of 113?p ? and received a £360,000 pension contribution, equivalent to 30 per cent of his salary.
Lord MacLaurin, who retires at the annual shareholder meeting next month, used his last chairman’s report to deny reports of boardroom splits. “There are no factions within the board and any claim that your board is not united is unfounded,” he said.
Sir John Bond, who will take over as chairman at the meeting, will be paid ?475,000, slightly less than Lord MacLaurin?s fees, which rose from ?485,000 to ?520,000 last year. Lord MacLaurin has decided to donate the controversial ?125,000 annual consultancy fee he will receive for the next three years to charity.