£2.4m pay for Vodafone boss

VODAFONE boss Sir Christopher Gent picked up £2.4m in pay last year and will collect a further £1.8m in share bonuses next month. This was despite a collapse in the world's largest mobile phone company's share price, last month's £20bn write-downs and the largest-ever loss in British corporate history of £13.5bn.

Today's annual report reveals that Gent's total pay package actually fell from £6.88m to £2.42m but a new scheme could push his remuneration up to more than £4m if the group's ailing share price recovers.

But Vodafone has bowed to shareholder pressure and said that in future its executives' pay packages will be based on comparisons with European rather than US competitors and bonuses will be much more closely related to the share price, which has fallen by 70% in the past two years.

Vodafone said it has the backing of its major shareholders, the Association of British Insurers and National Association of Pension Funds for its new scheme, which could still see Gent and his fellow executive directors collecting substantial bonuses in the future.

Last year, Gent received a one-off cash bonus of £5m which took his total package to £6.88m after protests from institutional shareholders which halved that bonus.

The annual report reveals that Gent's basic salary rose by an inflation-busting 12% to £1.19m and he receives a further £1.18m under the company's short-term incentive scheme. A spokesman for Vodafone said: 'We set salaries against our peer group and executive salaries continue to rise faster than inflation.'

The scheme, set up by the remuneration committee headed by former Coca-Cola chief Penny Hughes, has four elements: base salary plus short, medium and long-term incentives, all based in shares and share options. Hughes said: 'We have a remuneration policy capable of retaining and motivating the world class management needed to run a world class business, while at the same time giving shareholders confidence that management are rewarded only when appropriate and stretching performance targets are met.'

In future more than 80% of the executives' pay will be performance-related and 60% directly linked to the share price performance. Gent and his codirectors already own or are expected to own shares worth at least three times their base salaries. Shareholders will be asked to approve the scheme next month.

Vodafone gets OK on pay deals