Pru axes pay plans for third time

GIANT insurer Prudential has for the third time scrapped plans for a controversial pay scheme for top directors. It could have given chief executive Jonathan Bloomer up to £18 million over three years.

The move follows the group's decision this year not to push ahead with the packages for fear of outraging policyholders who were suffering swingeing bonus cuts.

The company said then that it considered it inappropriate to introduce the scheme after it had cut bonuses for policyholders four times.

Shareholders had also seen a large fall in the company's value and the Pru had cut its dividend for the first time in nearly a century.

It is not clear if the latest decision to keep pay packages on ice means that the Pru fears further cuts in policyholder bonuses next year.

These could coincide unhappily with the annual meeting at which shareholders would be voting on Bloomer's remuneration.

The Pru has promised there will be no bonus cuts for its

1.2 million with-profits policyholders this year, but it has given no assurance about 2004.

Lisa Buckingham - Page 4