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C&W top brass line up £220m in bonuses
Unions slam "outrageous" incentive scheme...

By David Meyer

Published: Tuesday 16 May 2006

The Communication Workers Union (CWU) has reacted angrily to an announcement this week that senior managers at struggling telco Cable & Wireless (C&W) could be in line for multimillion-pound bonuses.

The £220m incentive scheme, which follows the recent announcement of massive job cuts at the company, was proposed in a letter from chairman Richard Lapthorne to C&W's shareholders at the weekend.

If the proposal is approved, and the stated goals reached, the heads of the company's UK and international divisions could look forward to £22m each, while 60 other senior managers would carve up a further £176m.

Jeannie Drake, deputy general secretary of the CWU, called the scheme "outrageous".

She said in a statement on Monday: "The senior management team, having failed to deliver a turnaround in the company's fortunes, is now asking for extra bonus payments to achieve what they should have achieved in the first place."

The bonuses are conditional on a serious reversal of C&W's fortunes, including getting its share price up to 220p in the space of four years. The current price is around 100p but six years ago it was more than 15 times that amount.

In February the company announced it would focus on its larger corporate customers to enhance profitability, and subsequently dropped thousands of its small business customers.

The company also intends to halve its workforce over the next four to five years, and UK chairman John Pluthero warned staff the following year would be "hell".

Responding to criticism on Monday, a statement from C&W read: "The remuneration committee believes that this revised structure is critical to complement the company's strategy of growing the value of the [UK and international units] as distinct operations and provide a clearer link between performance and reward for the executives while retaining alignment between the interests of executives and shareholders."

David Meyer writes for ZDNet UK