Revolt over Pru chief's £18m

INSURANCE giant Prudential faces a humiliating clash with shareholders on a pay package that could give chief executive Jonathan Bloomer £18 million over three years.

Secret talks held last Thursday between the Pru and its biggest investors to try to reach a compromise drew a blank. A major shareholder said: 'It is fair to say that the concerns of shareholders were not completely addressed by the Pru.'

And another fund management group that has decided not to support the remuneration plan at this week's AGM told Financial Mail: 'The scheme has very, very complicated performance targets. We will abstain because the whole thing was incomprehensible and we couldn't tell what we were actually being asked to vote on.'

The showdown with shareholders is a big embarrassment for the Pru, which has a reputation for being tough on how boardrooms are run.

Company chairman Sir Roger Hurn also had to resign recently because of fears that the fallout from Marconi, where he was also chairman, would undermine his role at the Pru.

And Bloomer has been under pressure ever since the Pru's takeover of US life assurer American General collapsed last year. This raised questions about the Pru's ability to compete in the crucial US market and its ability to fund growth in its Far East operations.

A spokesman said the Pru began consulting its major investors on the pay scheme five months ago. 'In terms of corporate governance, I don't think we could have done anything more,' he said.

Shareholders are thought not to be worried that Bloomer could earn £18 million over three years if Prudential is the best performer out of 30 international rivals.

But they are concerned that he and other executives could pick up bonuses totalling about £3 million even if the Pru produces a middleranking performance.

It is the baffling complexity of the pay and share options packages that has angered most investors, however. Even remuneration experts regard the scheme as impenetrable.

And shareholders argue that, since the Pru is so outspoken about executive pay at other companies, it should produce a model scheme itself.