Sir Desmond branded 'King of the Fat Cats'

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Sir Desmond Pitcher, chairman of United Utilities, richly deserves his epithet as 'King of the Fat Cats', according to a report on bonus schemes published yesterday.

The controversial boss of Britain's first multi-utility is singled out in a survey of more than 80 new long-term incentive plans (L-Tips) carried out by Manifest, the proxy voting and research agency. The survey found that the majority of L-Tips schemes limit the size of awards to between 50-100 per cent of basic salary. However, it notes that United Utilities' incentive plan potentially awards its highest paid director up to 137 per cent of his salary.

"When compared to the salary of the highest-paid director it can be seen why there was some press coverage of the United Utilities scheme over the summer," the report said.

The scale of the awards at companies such as United Utilities has provoked heated political debate because the sums involved could match or even exceed amounts paid under share-option schemes discredited in the Greenbury report on excessive boardroom pay.

Under the United Utilities' scheme approved at a stormy meeting of investors this summer, Sir Desmond, who earned pounds 346,000 this year, is entitled to a short-term bonus of up to 40 per cent of his pay and a long- term bonus of up to 87.5 per cent of salary.

Manifest also criticised the high level of apathy among institutional investors about the issue of excessive boardroom pay. It contacted 66 large UK companies which asked their shareholders to approve L-Tip or similar incentive schemes at annual general meetings held between March and August this year.

It found that just under 60 per cent of shareholders failed to register a vote on a key corporate governance issue. "This low level of voting shows that shareholders are failing to make their views known to company management about their L-Tips," said Adam Kay, who analysed the results of the survey for manifest.