Investors in Cable & Wireless staged a mini-rebellion over pay today, as shareholders holding more than 12 per cent of the telecoms group refused to endorse salary and bonus arrangements for directors.

The protest, while small, underscores a growing determination among investors that big executive pay and perks' packages must be closely tied to business performance.

During this year's round on annual meetings, Shell, the oil giant, and GlaxoSmithKline, the pharmaceuticals group, have faced questions from shareholders over paid or planned retention bonuses for directors.

Knight Vinke, the activist shareholder, called on HSBC, the financial services group, to review the structure of its bonus arrangements ahead of HSBC’s annual meeting last month.

Investors have already voted through a "private-equity-like" rewards plan at C&W that means about 40 senior managers, including John Pluthero, the head of the UK and international businesses, could share a bonus pool that currently stands at £54 million.

That scheme lasts for four years and shareholders were not given a chance to vote on the issue today. Some investors have continued to express reservations about the way that the scheme works and may have used a vote on the remuneration report to make their feelings known.

Long-term shareholders expressed deep reservations last year when C&W moved to scrap a previous £20 million cap on potential executive rewards.

Richard Lapthorne, the chairman, has a separate share-based pay scheme that could earn him more than £11 million over a three-year period.

Today, almost almost 4 per cent of C&W shares were voted against the remuneration report at the company's annual meeting, while a further 8.3 per cent withheld their backing.

The dissenters were nowhere near strong enough to destabilise the motion, however, and the remuneration report was carried.

C&W declined to comment, although sources familiar with the group said nine out of ten shareholders had approved the report. They also noted that the original bonus plan was approved in 2006, as was the lifting of the bonus cap last year.

C&W managers have to meet performance criteria, based on the company’s cost of capital, as well as ensuring that the share price hits targets in order to qualify for the bonus.

The company, which has been targeting higher margin customers, has pleased investors with a 23 per cent rise in annual pre-tax profits to £605 million for the 12 months to the end of March.

Shares have fallen more than 12 per cent this year, closing yesterday at 168.2p, having started the year at around 185p.

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