CW.

Barely 12 months after one major controversy over the prickly issue of executive pay, Cable and Wireless (CW.) has stirred up another. The independent telco and internet services provider has drawn up plans to scrap a

£20 million cap on individual key managers’ remuneration, which it imposed following shareholder pressure last year. It will now offer potentially unlimited bonuses through its long-term incentive plan (LTIP) instead.

C&W has already amended the terms of the contract awarded to its chairman Richard Lapthorne. A new scheme could see Lapthorne scoop a bonus of up to 5.5 million shares, depending on how the group’s shares perform relative to the FTSE Global Telecoms index of comparable companies.

The telco defended the new contract, stressing its desire to retain Lapthorne’s services. A turnaround programme spearheaded by the firm’s chairman has helped to inspired a near-80% rise in its shares to 196p over the past 12 months. C&W also pointed out Lapthorne would receive no extra shares if performance relative to the basket of 30 peer companies is deemed to be ‘average’ over the stipulated three-year period.

The planned changes to the LTIP will be put to a vote at the £4.7 billion cap’s annual general meeting, which is scheduled to take place on 20 July.