Bonuses pad bosses' pension hit

BRITAIN'S top bosses stand to lose £2.5bn in pension tax breaks - but they are still seeing their rewards soar.

Actuaries Watson Wyatt report that more than 90% of companies do not plan to compensate executives for extra tax bills as a result of Chancellor Gordon Brown's £1.5m lifetime limit on tax-free pension savings.

The cap is part of a package of measures to simplify pensions. Tax on any excess over £1.5m will be a punitive 55%.

This will hit highly-paid individuals such as Lord Browne of Madingley, chief executive of BP, who has a £13.9m pension pot.

Experts have warned that it will catch more modestly-paid professionals earning upwards of £70,000 a year as well as the super-rich.

Bosses can console themselves with the findings of Incomes Data Services that directors' bonuses are running at 57.6% of their total pay, up from 40% a year ago.

A separate survey rated Rolf Stahel, former boss of Shire Pharmaceuticals, with rewards of £4.7m, as Britain's poorest-value chief executive.

Other bad-value bosses included former Vodafone supremo Sir Christopher Gent - chairman-in-waiting at GlaxoSmithKline - and GSK's chief executive Jean-Pierre Garnier.

Gent has been drafted in to combat rows about fat-cat pay at Glaxo, which was hit by a shareholder revolt last year over Garnier's package.