Cable and Wireless is seeking to hold onto senior executives at its UK business by proposing they could benefit from large share awards for “exceptional performance”.

The telecoms company on Tuesday published documents running to more than 700 pages about its demerger in March, which will result in separate listings for its UK and international businesses, known respectively as C&W Worldwide and C&W Communications.

The documents outlined proposed modifications to C&W’s controversial long term incentive plan, which last year paid out £32m to senior managers.

The changes could result in share awards for exceptional performance, and Jim Marsh, chief executive of C&W Worldwide, Tim Weller, finance director, and Ivan Gunatilleke, chief operating officer, are set to benefit.

They could receive share awards in 2011 based on an enhancement of their participation in C&W’s long term incentive plan.

If C&W Worldwide’s share price doubled between 2011 and 2014, they would receive further awards of similar size to the initial ones due next year.

The proposed awards for Mr Marsh and his colleagues reflect how C&W is trying to ensure that managers responsible for its turnround stay at the company well beyond the demerger.

It is partly a move to reassure investors that C&W Worldwide’s revival, led by John Pluthero, its chairman, should not be put at risk by the loss of key executives.

The business had been in long-term decline until 2006 when Mr Pluthero unveiled his turnround strategy, which is based on serving companies rather than consumers.

The demerger documents also outlined salary increases for executives at C&W Worldwide and C&W Communications. Mr Marsh’s salary will rise by 30 per cent after the demerger to £650,000.

C&W said: “We are paying our executives what we consider to be a reasonable rate, in line with their duties and comparable packages at peer companies.”

C&W’s long term incentive plan, which is based on share price performance, has caused controversy with some investors because of its large cash rewards. Mr Pluthero received £8.3m last year. The amount Mr Marsh got has not been disclosed.

Meanwhile, C&W sought to remove the last major obstacle to the demerger by announcing a £30m cash injection into its defined benefit pension scheme.

The scheme, which had a £309m deficit under accounting rules at September 30, will be split between C&W Worldwide and C&W Communications after the demerger.

The demerger will begin on March 22 with the listing of C&W Communications. C&W Worldwide will follow on March 26.

C&W confirmed that the group dividend for 2009-10 would be 9.5p and that it hoped the two new listed companies would, in aggregate, make an identical payment in 2010-11.

Source:FT.COM