Monday, February 7, 2011

Association of British Insurers acts to curb unlimited boardroom bonuses

Cable & Wireless came under fire for its controversial private equity-style executive bonus scheme. Photograph: Graeme Robertson/Getty Images

Leading investors have put the UK's 350 biggest companies on notice that they will not tolerate new pay deals that provide potentially unlimited bonuses to senior executives.

Institutional shareholders have become increasingly aware that bonus deals offering potentially blank cheques are being devised for boardroom bosses. These new-style deals differ from more traditional long-term bonus arrangements which would usually limit the ultimate size of a bonus to a pre-determined level of a director's salary.

The new arrangements being proposed for directors set a performance hurdle for directors

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