UK banking systems vendor Misys is facing a major shareholder rebellion over plans to award two senior managers bonuses worth £1.2m each to stop them leaving the firm if they fail to become chief executive, according to a Financial Times report.
The report says that several of the vendor's institutional investors plan to vote against the proposal to award loyalty bonuses to Ivan Martin, head of Misys' banking division, and Tom Skelton, head of the firm's healthcare division, to prevent them from leaving the firm if they are not selected to succeed existing executive chairman and CEO Kevin Lomax, who plans to become non-executive chairman by 2008.
The shareholder vote will take place at the vendor's annual meeting on 13 September.
According to the report, Misys is proposing to award each executive shares worth £600,000 in four years time if they 'successfully execute business strategy'. The two will receive the same amount again after three years if each hits performance targets based on increasing divisional operating profits.
A Misys spokesman told the FT that the performance targets are "stretching" and some of the firm's largest shareholders have signalled support for the bonus scheme.
But the Association of British Insurers, whose members control about a fifth of the UK stock market, has issued a 'red-top' guidance on the proposed bonus - its highest level of concern.