Vodafone will review its pay arrangements after shareholders rebelled against directors' bonus packages for a second year running.
Two-fifths of investors who voted in a postal ballot opposed or abstained on a resolution to approve the directors' remuneration at its annual shareholder meeting in London yesterday.
The revolt reflected concern about the number and level of bonus schemes at the company, which could award chief executive Chris Gent up to £12 million sterling worth of share options in the current year, according to shareholder advisory body Pension Investment Research Consultants (PIRC).
Vodafone chairman, Lord MacLaurin, promised shareholders "a thorough review of remuneration arrangements".
He also defended the "incredibly stretching" targets of one of its option schemes and said Vodafone would "unashamedly" pay the best possible salaries for the best possible people.
Vodafone's share price headed back towards 34-month lows as he spoke, falling as much as 3 per cent to 138 1/2 pence.
It was the second year running that Lord MacLaurin had to defend remuneration. He apologised at last year's meeting over the handling of a £10 million bonus for Mr Gent.
The review represents the biggest concession to institutional investors in a revolt against options schemes at Britain's largest telecoms companies this month. Cable & Wireless Plc shrugged off a 28.5 per cent vote against its options plan last week. The results of the review will be presented next year.
