Leading Vodafone shareholder to oppose MacLaurin re-election

One of Vodafone AirTouch's biggest UK shareholders is threatening to vote against the reappointment of Lord MacLaurin as chairman in protest against the £10m bonus awarded to the company's chief executive, Chris Gent.

One of Vodafone AirTouch's biggest UK shareholders is threatening to vote against the reappointment of Lord MacLaurin as chairman in protest against the £10m bonus awarded to the company's chief executive, Chris Gent.

Lord MacLaurin was chairman of Vodafone's remuneration committee when the decision was made to pay the bonus as a reward for Mr Gent completing the £105bn takeover of Mannesmann.

A vote against the re-election of Vodafone's chairman would be deeply embarrassing for the company and could even force Lord MacLaurin's resignation if sufficient numbers of other large shareholders took the same stance.

The row guarantees that Vodafone's annual meeting on 27 July at the QE2 centre in London will be a stormy affair. Other big shareholders are planning to abstain on a variety of votes to approve Vodafone's remuneration policy and the re-election of Mr Gent as a director.

The National Association of Pension Funds (NAPF) has advised its members to abstain in the vote on the remuneration policy and Mr Gent's re-election and vote against the election of a German director, Thomas Geitner.

Lord MacLaurin sought to defuse the row last week by issuing a statement promisingVodafone could not repeat the bonus payments. But the NAPF said his assurance had not changed its position.

Shareholders were particularly angered that £5m of Mr Gent's £10m bonus was paid in cash in April and was not tied to performance conditions. The other £5m is in shares which will only become available if Vodafone meets certain targets.

Institutions were also incensed at Vodafone's differing explanations for the bonus. It initially described it as a "catch-up" payment and said that institutions had been sounded out before the payment was agreed.

But it emerged that many large shareholders only became aware of the bonus in May, when the payment was made in April. A letter to 20 top shareholders dated 3 May also clearly refers to the payment as a "merger bonus award".