Cable & Wireless was on course for a bruising encounter with investors today after lobby group the Association of British Insurers hit out at controversial changes to its pay and perks policy.

The ABI, whose members hold more than a fifth of the UK stock market, declared that it had little enthusiasm for a new scheme that would see top executives at the telecoms group handed awards of more than £20 million.

The group also condemned C&W’s lack of discussion on the plans which will be voted on at the group’s annual general meeting in July.

A “private-equity” style incentive scheme was introduced at C&W last year as part of efforts to revive the fortunes of the moribund group. But at that time a cap limited potential awards to £20 million.

Peter Montagnon, the director of investment affairs at the Association of British Insurers , said: “There is not much overall enthusiasm for these proposals, particularly with regard to the removal of the cap - although views are mixed.

“The cap which is to be removed was an integral part of last year’s carefully negotiated arrangement.”

He added: “Unfortunately there has not been time to complete discussions about the details, and shareholders will make up their minds in due course."

Changes to C&W's rewards scheme specifically would benefit John Pluthero and Harris Jones, the heads of the telecoms group's respective business divisions, created a little over a year ago. It is understood that Mr Pluthero is close to qualifying for a payout of more than £20 million under the firm's long-term incentive plan (LTIP).

He runs the European, Asian and US arms of C&W. Mr Jones runs C&W International, effectively the rump of other geographies.

The group, in the thick of an ambitious recovery plan under Richard Lapthorne, the chairman, wants to remove the cap on the amount that can be paid out to any member of the LTIP plan.

About 60 directors qualify for a portion of a share-price linked bonus pool that is worth about £120 million at present.

But Standard Life Investments, C&W's number-two shareholder, gave its qualified support for the proposal. Guy Jubb, head of corporate governance, said: "The proposals deserve careful consideration. The leadership team at Cable & Wireless has made and continues to make a vital contribution to improving performance and restoring value.

Times Recommends

• US stocks fall below 9,000 mark
• House price fall smallest in seven months
• Wary investors opt to keep cash in safes