Pirc, the shareholder organisation, urged its members today to vote against Cable & Wireless’s “limitless” bonus plan and to abstain from voting for its chairman.

The body, which advises shareholders with £750 billion of assets under management, said that awards available to C&W executives were “significantly in excess” of its best-practice guidelines.

It sais that the performance targets laid out by the telecoms group were “not considered challenging” given the level of awards available.

The report will turn up the heat on C&W before its annual meeting on July 20.

Yesterday the ABI issued the telecoms group, which is BT’s main rival, with an “amber-top” warning over the proposals.

Shareholders, it said, would need to “carefully consider the appropriateness of the reward level”.

C&W introduced a “private equity style” bonus scheme for its top executives last year.

The scheme — aimed at helping to transform the fortunes of the once ailing group — was waived through at last year’s annual meeting.

But C&W is now proposing radical changes, including the removal of a cap that prevents individuals including John Pluthero, chairman of the UK business, from receiving bonuses of more than £20 million.

Pirc told its members to oppose the removal of the cap.

The group also advised members to abstain from voting for Richard Lapthorne, the C&W chairman.

It said that it did not support the appointment of a chairman with executive responsibilities.

Under the changes to its pay and perk scheme, Mr Lapthorne will be awarded up to 5.5 million shares — worth about £10 million — if he meets certain performance criteria.

The C&W pay plans are among a series that have met shareholder controversy this summer.

Last week nearly one in five Tesco shareholders refused to back a bonus scheme that could mean that Sir Terry Leahy, the chief executive, is awarded £11.5 million on top of his salary.

Marks & Spencer, the high street retailer, has also been forced to bow to shareholder pressure and modify the terms of its controversial bonus scheme for Stuart Rose and other top directors.

A spokesman for C&W said: “Since the introduction of our innovative Cash Long Term Incentive Plan, Cable & Wireless has delivered ebitda and cash flows considerably better than initial expectations and the share price has risen by over 80 per cent.

“Our proposed changes are designed to drive us forward to materially higher levels of shareholder value. Only if we achieve these levels of performance will there be any additional payments to the management team."

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