Telewest facing bonus backlash

TELEWEST, the cable TV group, faces a clash with some of its major shareholders over the decision to pay huge bonuses to executives - despite a 98% plunge in its share price since the height of the dotcom boom.

Four directors, including chief executive Adam Singer and finance director Charles Burdick, shared £690,000 in bonuses, even though the company is £5.3bn in debt.

The Association of British Insurers, which represents investors, has highlighted the bonus issue to its members ahead of Telewest's annual meeting on 11 June. It is understood the shareholders are particularly concerned about a £170,000 special payment to Burdick for arranging a new line of credit for the group. One shareholder said: 'This is a bonus for someone doing what should be his normal job. For a company that has lost so much shareholder value, paying bonuses is unacceptable.'

The National Association of Pension Funds said it would be looking at the bonuses this week, but said rewards for poor performance or failure should not be tolerated.

But Telewest is unrepentant. A spokesman said that the company's two major investors, Microsoft and Liberty Media, which together speak for 50% of its equity, were represented on the remuneration committee that had approved the payments.

He said the company had not been contacted by institutional shareholders over the bonuses, though private investors had been in touch 'These bonuses have already been paid,' he said. 'It is up to shareholders - and we are controlled by two big shareholders - so the whole thing is a fruitless discussion. They [other investors] are entitled to their view, but it would be a waste of our time even to think about it.'

Shareholders will not be given the chance to vote on pay at the annual meeting, but could express opposition by voting against the re-election of individual directors or adopting the annual accounts. The spokesman said there was no question of Telewest retreating on its plans, even if it faced strong hostility from investors.

Investors in GlaxoSmithKline will vote at the drug company's annual meeting this week on a special bonus scheme that could mean an extra £2.4m for chief executive Jean-Pierre Garnier.