Vodafone faces row over bonuses

VODAFONE is set to test the resolve of its City critics by revealing a new share incentive plan for executives in its annual report today. One of the key issues will be the grant of options based close to the current share price of 93 1/4p. This is less that a quarter of the mobile phone giant's share peak of £4.

Big City investors who have taken hefty losses will be incensed if directors get the chance for cheap gains. But there will be tough targets.

Chief executive Sir Christopher Gent is expected to get a further £1.5m bonus. Vodafone argues that this is part of an agreed package, originally worth £10m for the takeover of Germany's Mannesmann but critics have homed in on it as a payment simply for doing a deal irrespective of the results.

Rival Deutsche Telekom raised the stakes on Tuesday by waiving options for a large number of its managers and halving other incentives. Many investors feel Vodafone should follow suit in recognition of the sharp fall in its share price.