BAE's Turner moves into £1.5m league

Mike Turner, the chief executive of BAE Systems, the defence giant, picked up a £712,000 bonus last year, taking his total package to £1.5m, an increase of more than 20 per cent.

Mr Turner's base salary of £730,000 last year will be increased to £800,000 for 2005, the company's annual report also showed. Mr Turner enjoyed a bumper award of share options during 2004 and a big boost to his pension pot, increasing its transfer value by £1.3m to £7.2m.

The remuneration bonanza came despite BAE underperforming the FTSE 100 index for "total shareholder return" in 2004 and the previous two years, according to a graph in the annual report.

During 2004, Mr Turner was awarded 99,974 shares under the company's "long-term incentive plan". He also collected 544,776 shares under the "executive share option plan" plus 363,184 shares under the "performance share plan".

Mr Turner is sitting on 1.1 million share options with an average exercise price of 186p each, which can be accessed from 30 September next year. He also has 671,215 options at an average price of 354p each, which can be exercised until 2012.

Separately, the Department of Trade & Industry said it would not refer the proposed sale of BAE's communications and avionics arm by Finmeccanica to the Competition Commission. Gerry Sutcliffe, the Under Secretary of State for Competition, had considered referring the deal on security grounds.