UK - Pension funds have criticised a £1.5m payoff for outgoing Cable & Wireless chief executive Graham Wallace.
The telecoms company has already come under fire from pension funds for its executive share schemes and two-year rolling contracts for executives.
The NAPF says that these increase the likelihood of costly pay-offs, such as the one awarded to Wallace following his resignation.
NAPF spokesman Andy Fleming said: “While we would not want the company to renege on its contractual obligations, it should be looking at ways of mitigating any pay-off through staging payments, for example.”
Fleming also said that Wallace should ask himself whether it was appropriate to accept a large pay-off in light of the damage done to shareholder value.
A C&W statement did not provide any clear reasons for Wallace’s departure but stated: “Graham Wallace will continue to be responsible for day-to-day operations until the search for his successor is completed.
During this period Graham will also be responsible for delivering the cost reduction programmes.”
The NAPF’s voting issuance notice for the C&W annual general meeting held on July 12, 2002, recommended abstaining in the vote to re-elect Wallace as a director on the grounds that he was not independent.
It also pointed out that the company’s remuneration report was not an agenda item at the meeting, which meant that shareholders were unable to vote on its contents.
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