M&G share option plan wins egm approval

M&G's controversial executive share option scheme was approved by an extraordinary general meeting yesterday. The scheme run by the investment management group breaks guidelines set out by fund management trade bodies.

The National Association of Pension Funds and the Association of British Insurers recommend that executive share option schemes link rewards to benchmarks of management performance.

Many option schemes come up for renewal this year, the tenth anniversary of their introduction. Reuters recently announced a new scheme that only gives executives shares if the group's share price outperforms that of other FT-SE 100 companies.

M&G's scheme contains no performance element. Sir David Moneycoutts, chairman, said: 'The best measure of long-term performance is the value shareholders put on the business. A lot of the companies in which we invest were hoping that we would carry the day because they regard benchmarking as far too cumbersome.'

The M&G scheme was passed comfortably thanks to the vote of the Esmee Fairbairn Charitable Trust, which holds more than a third of the shares. But just half the possible votes were cast.

John Rogers, of the NAPF's investment committee, said: 'We anticipated this result, but it might shake up our sleepier members to exercise their votes in future.'