Pru boss loses out on bonus

PRUDENTIAL boss Jonathan Bloomer is set to miss out on free shares worth up to £1.32m because the insurer has failed to hit self-imposed performance targets.

The group, which reports annual results today, has also finally abandoned a controversial pay and bonus scheme that could have netted Bloomer up to £18m.

The insurer has been dogged by the issue of executive pay since 2002, when it shelved plans to hand him a lavish new package after shareholder protests.

The Pru initially hoped investors would approve an alternative scheme. But it has now accepted that boardroom pay hikes would be tactless amid policyholder gloom over pensions and endowments.

The company will announce bonus rates with its results today. Insurance experts said maturity payouts on 25-year policies are almost certain to fall further.

Bloomer will be forced to forgo his free shares, potentially worth up to 200% of salary under a three-year incentive plan, after Pru fell short of its own performance benchmarks.

But, unlike unhappy customers facing mortgage or pension deficits, he is unlikely to go short.

He was paid just over £1m last year and is sitting on paper profits of around £1,000 a day after cannily buying 190,000 shares in the company, up /4p to 510 1/4p, at the bottom of the market in March last year.

Losses at Pru's internet and telephone bank Egg, where it is trying to sell its majority stake, swelled to £34m as a good showing in the UK was dragged down by dire results in France. Egg chief executive Paul Gratton said the auction for the credit card provider, up 3p at 170p, was 'ongoing'.

Possible bidders include MBNA of the US. Others, including Royal Bank of Scotland, appear to have backed away.