Prudential has paid its chief executive, Tidjane Thiam, £4.7m for 2010 even after his botched bid for AIA cost the insurer £377m.
Mr Thiam will get a bonus of £1.57m – only £50,000 less than the maximum – on top of his £900,000 salary. He will also receive £2.1m in long-term share payments based on the Pru's shareholder returns for the past three years.
Prudential said it had taken the costs of the AIA deal into account when calculating Mr Thiam's pay. He has agreed to take all his bonus in shares deferred for three years instead of getting half in cash, as he would normally.
The Pirc shareholder group said it had concerns about the payments, which investors still have to vote on at the Pru's annual meeting. "Given that the failed AIA bid incurred transaction costs of hundreds of millions we will need some convincing that bonus awards significantly higher than those for 2009 are justified. Simply converting this into a shareholding does not automatically make it acceptable."
However, a fund manager who was fiercely critical of Mr Thiam at the time of the AIA deal said the company had listened to shareholders and his institution would accept the pay deal.
"The good news is they have taken the issue of the failed deal into account in assessing the size of the bonus pool. The underlying business is in good shape as a result of the work they did and they deserve payment for that. We have no problem with people paying decent money for decent performance and this is reasonably sensible."
Mr Thiam tried to buy AIA, the Asian business of the stricken US insurer AIG, last year but pulled out under pressure from shareholders who thought the deal was too risky and expensive. His job and that of chairman Harvey McGrath were under threat but the Pru's strong results and a surprise 20 per cent rise in the annual dividend have helped win over investors.