GEC chief's revised contract not approved

The new pay and incentives package awarded to George Simpson, GEC's new chief executive, has still not been approved by the company's remuneration committee, it emerged last night.

A spokesman for the defence and electronics giant confirmed that Mr Simpson's revised service contract had yet to be rubber-stamped by GEC's executive pay body.

No reason for the delay was given, prompting speculation that GEC may back-track on a deal struck last week with the Association of British Insurers, which speaks for large City institutions, in an attempt to defuse the latest "fat cats"row.

Fund managers reacted angrily to news of the delay. "If they [the remuneration committee] are going to rat on something we have agreed we would vote them off the board," said one leading institutional investor.

The delay in finalising Mr Simpson's contract is also bound to cause embarrassment to GEC and its chairman, Lord Prior, who last week took the unusual step of apologising to shareholders at their annual meeting for the way the affair had been handled.

Mr Simpson's original remuneration threatened to spark a revolt among institutional investors who claimed the performance threshold needed to trigger share option and incentive awards worth up to pounds 10m was too low. But days before the annual meeting, the terms and conditions were amended after GEC directors met Richard Regan, head of investor affairs at the ABI.

Mr Simpson's performance criteria are now based on top quartile share performance as measured against the FT-SE 100 index. He will receive an annual salary of pounds 600,000 plus annual pension contributions of pounds 300,000 and a one-off pounds 500,000 payment.