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Cable & Wireless investors suffer despite Vodafone interest

CWC has lost 33% of its value since the 2010 demerger, while CWW plunged to just 15p before Christmas

Seven years ago Sir Richard Lapthorne, chairman of Cable & Wireless said it was “almost a certainty that people are doing their numbers on us”, meaning that private equity funds were sniffing around the company to consider whether to make a takeover bid.

A private equity-style bonus scheme for C&W’s directors and top management was introduced and no bids came in for the company, which was then worth more than £3bn.

The bosses were rewarded. The top 20 employees have shared more than £30m in payouts, with the former boss John Pluthero pocketing almost £15m. “Do I work harder because there may or may not be a certain price at the end of the rainbow? Well, work it out for yourself,” Pluthero has said of the pay deal.

In 2010 alone, Pluthero collected £10.9m after the plan paid out £8.3m when C&W split into two companies. His long-standing number two Jim Marsh, who went on to run CWW, got £9m.

Once the cash payouts were secured, things got worse.

Both Cable & Wireless Communications (which acts like the BT of the Caribbean flogging broadband, mobile and home phone to islanders and tourists) and Cable & Wireless Worldwide (which sells internet services to multinationals in the UK) have collapsed in value.

CWC has lost 33% of its value since the April 2010 demerger. While CWW’s share price plunged from 90p to just 15p in the run-up to Christmas (before rumours of a bid from Vodafone and others began to leak out).

Even if Vodafone does buy out CWW at the suggested £700m price, shareholders who have stuck with the company will have lost more than half of their investment in that part of C&W alone.

Meanwhile, Pluthero and Marsh, who have left the company, are free to enjoy the pots they collected at the end of the rainbow without any fear of clawbacks.

Lapthorne is still the CWC chairman. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds