Retail shareholders used the general meeting to castigate C&W’s board over its generous long-term incentive plan, which they said was at odds with the company’s dire performance over recent years. Yet institutional shareholders sent the plan sailing through, voting 85.6 per cent in favour to 14.4 per cent against, after a series of meetings with Mr Lapthorne. The chairman delivered an impassioned defence of the plan, which could cost the company as much as £220 million if all targets were hit by March 2010.

“For John Pluthero [UK group managing director] to earn £20 million, the share price would have to double in two years and he’d have to sort out the UK for an investment of less than £250 million,” Mr Lapthorne told investors. “You won’t find an analyst saying that that is likely.” He said that the plan, under which the share price would have to hit 220p to vest entirely, was as closely aligned as possible to shareholders’ interests. C&W shares closed down nearly 4 per cent at 108¾p.

“The feedback from my one-to-ones with institutions . . . is that the alignment is amongst the best they’ve seen,” Mr Lapthorne said. “[The money on offer] has to be big enough to get your attention, it has to be big enough to change your life. If it’s too small, it won’t work.”

The incentives will be capped at £10 million if C&W is bought before April 1, 2007, but Mr Lapthorne was sceptical that a bid would emerge. “This isn’t going to be a company where private equity comes along and takes a slide of value that belongs to shareholders,” he said.

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