Cable and Wireless is considering a new pay scheme for its top managers, that could reignite a two-year-old row with investors.

Richard Lapthorne, chairman of the telecoms group, wants to set up a new incentive scheme because the old one expires in 2010 and he is keen to retain key staff, including John Pluthero, the head of the UK business, who have overseen a turnaround at the company.

However, the last time the company tried to institute a private equity-style scheme that might have enabled 60 managers to share a £216 million bonus pool, investors holding a fifth of the company's shares opposed the scheme.

In July, C&W won approval for plans to offer top bosses limitless private-equity style incentive schemes despite protests from more than one in 10 shareholders. Mr Lapthorne scrapped the £20 million cap on individual bonuses.

A spokesman for the company said that it was no surprise that the company was looking at a scheme. However, he added that its likely form would be very different from the previous private equity-style scheme, reflecting the more normalised state of the businesses.

The value of any payout under the existing scheme will be predominantaly based on C&W's share price which has fallen by 6 per cent so far in 2008.

"Whatever is considered will be on the basis of full consultation with shareholders and driven by the principle of complete alignment to shareholders and the creation of shareholder value," the spokesman said.

In a trading statement issued today, the group said it was on track to meet earnings targets unveiled at its interim results in November. Mr Lapthorne said underlying earnings for the year to March 31 would fall between £585 million and £610 million - between 19% and 24% ahead of the previous year.

As well as operations in Europe, Asia and the US, the company’s international operations provides mobile, broadband, domestic and international fixed line services in 33 countries.

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