Compass Group, the contract caterer, has introduced new restrictions to its executive bonus plans following meetings with its top 10 shareholders.
The FTSE 100 company also met with the Association of British Insurers (ABI) and the National Association of Pension Funds (NAPF) before publishing the changes in its annual report, released yesterday.
The report also reveals that Mike Bailey, the company's chief executive, saw his pay slashed from £2.6m in 2003 to ú1m last year after a torrid 12 months to 30 September which included a profit warning shortly before the year end.
Mr Bailey received no bonus for the year after being paid £1.6m in bonuses in 2003. Yesterda's annual report includes a raft of changes relating to matching shares, Compass's long term incentive plan and the rules governing when executive share options are exercisable.
The report reveals that Compass will pay an enhanced bonus for performance "considerably in excess of target", which can be invested in Compass shares. The shares bought will be matched by a further share award by the company.
However, all matching shares will now be subject to performance criteria as well "reflecting evolving shareholder opinion".
No matching shares will be awarded if earnings per share growth is less than RPI plus 4 per cent while a full matching share allowance will only be paid if eps growth is RPI plus 8 per cent.
Compass has also changed when executives can exercise share options. For 30 per cent of options to be exercisable, eps growth, over a three-year performance period, has to be at least an average of RPI plus 4 per cent per year. 100 per cent of options will vest at RPI plus 8 per cent per year.
Previously no options were exercisable unless eps growth was a simple 6 per cent per year.Reuse content