Arun Sarin, Vodafone's chief executive, received a £1.4m bonus on top of a £1.3m annual salary despite suffering a tumultuous year in which Europe's largest mobile phone company reported the largest ever UK corporate loss.
Over the past year, Mr Sarin has come under intense pressure as a result of
difficult trading conditions, a flagging share price and much-publicised boardroom ructions that led to the exit of the life president Chris Gent and the firing of the marketing director Peter Bamford.
Shareholders have also openly criticised Mr Sarin's strategy and communication with investors.
A year ago, Vodafone shares changed hands at around 140p, but, after disappointing guidance at its interim results in December, the shares dropped towards 100p.
The share price has since clawed back some ground after the company's decision to sell its troublesome Japanese division and use the proceeds to fund a £9bn return of cash to shareholders.
Vodafone shares closed yesterday 1.3 per cent lower at 113.5p.
Nevertheless, the company's board has benefited from increased bonuses over the year.
Mr Sarin's total remuneration rose 8 per cent to £2.7m, and the departing deputy chief executive, Sir Julian Horn-Smith, received a 14 per cent rise in total pay to £2.2m.
Overall, Vodafone's directors received a 20 per cent pay rise over the year to £12.7m.
A Vodafone spokesman said that the bonuses were based on a number of measures based on adjusted operating profit, free cash flow, service revenue and customer satisfaction levels over the year.
He added that the company's shareholders approved the incentive scheme at last year's annual meeting when it was passed with a 96 per cent majority.
For the year to 31 March 2006, Vodafone reported a 10 per cent rise in revenue to £29.4bn while its adjusted profit reached £6.3bn.
However, including impairment charges, it reported a loss of £21.9bn for the year.
According to press reports, certain shareholders will attempt to block Mr Sarin's re-election to the board at the annual meeting on 25 July.
Hermes, which holds a stake of about 1.2 per cent in Vodafone, has been named as the leader of the rebel shareholder group, a charge it has denied.
Standard Life is another shareholder which has publicly criticised the company over the past year.
A Standard Life spokesman declined to comment on Vodafone's annual report which was published yesterday.
Following the publication of the company's full-year results and strategy update in May, Mr Sarin embarked on a roadshow with investors to explain its new strategy which includes an entry into the broadband internet market.
Sources close to the situation have said that the shareholder feedback has been generally positive.
It is understood that Mr Sarin has met both Hermes and Standard Life over recent weeks.
- INDEPENDENT
Arun Sarin, Vodafone's chief executive, received a £1.4m bonus on top of a £1.3m annual salary despite suffering a tumultuous year in which Europe's largest mobile phone company reported the largest ever UK corporate loss.
Over the past year, Mr Sarin has come under intense pressure as a result of
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