Arun Sarin, chief executive of Vodafone, saw his pay package rise nearly 20 per cent in the last financial year as he achieved many of the mobile phone group's internal performance targets.

Mr Sarin took home more than £3.2 million (€4.7 million), a rise of 18 per cent on last year after receiving £1.27 million in salary and £1.93 million in share awards, according to figures from the group's annual report, published yesterday.

He also received £2.89 million in shares from a long-term incentive programme. Last month, Vodafone beat market forecasts after announcing operating profit would be potentially flat in the coming financial year while it forecast that 2008 sales would exceed some estimates because of higher growth in emerging markets.

The shares have risen 40 per cent in the past 12 months as investors have increasingly come round to the board's strategy that has emerging markets as its growth engine.

Executive bonuses for the next financial year will be based on Vodafone achieving earnings-per-share growth of between 5 and 8 per cent, down from 5 to 10 per cent a year ago.

Vodafone caused consternation among some shareholders last year by proposing changes to its pay policy, potentially linking directors' bonuses to four performance measures: revenues, earnings before interest and tax, free cash flow and "customer delight", an independently defined measure of customer satisfaction.

The group said the lowering of the target again for 2007-08 matched changing market conditions.

The annual report also confirmed that Efficient Capital Structures (ECS), the activist investment group backed by former Marconi executive John Mayo, had successfully requisitioned four proposals to be put to the group's annual meeting next month.

ECS wants the group to restructure its balance sheet and create a tracking stock in its investment in Verizon Wireless to create shareholder value, but Vodafone has urged shareholders to reject the proposals.