Norweb set to join Greenbury revolt

Rebellion against the Greenbury Committee will continue today when Norweb, the electricity company, ignores recommendations to put its executives on one-year contracts.

Prudential, the insurance giant and Norweb's largest institutional shareholder, is expected to back a resolution from the board that three directors be re-elected on two-year rolling contracts.

The move comes as an emergency meeting of the Greenbury Committee today is expected to reveal further divisions among members. They meet this morning, in advance of a 3.30pm meeting with Michael Jack, Financial Secretary to the Treasury, and other officials, including representatives of the Inland Revenue.

This follows publication of the Greenbury Report last Monday, which prompted the Government to change the tax treatment of executive share options and caused a furore among business leaders.

It emerged during the week that several committee members, including the chairman, Sir Richard Greenbury, had serious reservations about the recommendations on share options.

Over the weekend Sir Michael Angus, a committee member, suggested the Treasury might consider transitional arrangements for the introduction of the changes.

But another committee member said yesterday that Greenbury had failed and should not now be telling the Treasury what to do. "All we can do at this afternoon's meeting is clarify our position - if that's possible after our own meeting."

A third member of the committee said the report had been clear in its recommendation that the tax changes should apply only to high-earning executives of public companies, not middle managers and low-earners. "Ken Clarke [the Chancellor] was not following our recommendation in the report. We can only ask him to reconsider," he said.

However, the Treasury remained firm yesterday that it would not revise the tax changes, despite the mounting weight of opposition from MPs and senior industrialists. It was claimed last night that some Cabinet ministers were having reservations about Mr Clarke's changes.

The Greenbury Committee, set up largely in response to pay excesses of the privatised utilities, risks being further discredited today at the annual meeting of Norweb.

A resolution from small shareholders calling for directors' contracts to be cut to one year is being ignored by the board. Alec Simmons, Peter Salsbury (CRRT) and George McTague are being recommended for renewal of two-year contracts. Norweb is expected to defend the action by claiming that last year it cut contracts from three years to two.

Comment, page 17

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