C&W's high-wire act

"We pay our executives what we consider to be a reasonable rate, in line with their duties and comparable packages at peer companies," says Cable & Wireless, as it prepares for yet another showdown. Shareholders might wish to see those comparisons in detail. There cannot be many telecom executives at companies the size of C&W (market value £3.7bn versus BT's £9bn and Vodafone's £78bn) who enjoy John Pluthero's opportunity to take out £11m mid-stream. And who is C&W trying to kid? We know the history here. C&W's incentive scheme was sold to shareholders in 2006 as a way to see off the private equity vultures. The pitch was: pay our managers like private equity managers and enjoy the ride yourself. The shares, despite going mostly backwards for the past two years, are still up 30% over three years. But that level of performance doesn't earn bragging rights in the world of private equity. Shareholders' fears that the scheme was too generous at the outset have been realised.