Gent bids to defuse pay row by buying shares

Chris Gent, the chief executive of Vodafone AirTouch, moved to head off a shareholder revolt yesterday when he agreed to transfer part of a controversial £5m cash bonus into shares in the mobile phone group.

Chris Gent, the chief executive of Vodafone AirTouch, moved to head off a shareholder revolt yesterday when he agreed to transfer part of a controversial £5m cash bonus into shares in the mobile phone group.

However, an analysis of Mr Gent's stock options, contained in the company's annual report, shows that he could purchase almost 2.6 million shares for a weighted price of 111p per share. That is slightly more than one-third of the company's share price, which yesterday closed up 6p at 302p.

Designed to draw a line under the affair, the proposal is for Mr Gent to buy about 900,000 Vodafone shares during the next year and hold them for at least three years. Mr Gent already owns 1.1 million shares, including shares purchased in June when he spent £800,000 on Vodafone stock.

Mr Gent's stock options would allow him to purchase the 900,000 shares for about £1m. That would only amount to about one-third of the £3m post-tax value of the one-off bonus.

The row over what Vodafone considered to be Mr Gent's reward for the successful takeover of Mannesmann had led several institutional shareholders to consider abstaining on the re-election of Lord MacLaurin, the chairman, at Thursday's annual meeting. Both he and Lord MacLaurin have faced sustained criticism for the bonus, which also included a further £5m worth of Vodafone stock to be awarded in two years if performance targets are met.

Two other executives, Ken Hydon, the finance director, and Julian Horn-Smith, head of continental European operations, have not yet made pledges to invest further in the company. Each executive received a bonus worth £3m comprised of £2m in shares and £1m in cash.

It was unclear last night whether institutional shareholders would be mollified by the new arrangements. The proposal came on the eve of today's deadline for submitting proxy votes ahead of Thursday's AGM.

A spokesman for the National Association of Pension Funds, which had urged institutions to abstain on the remuneration policy vote, said: "It's better. It's likely to make a lot of shareholders much more comfortable."