Prudential boss Tidjane Thiam will earn a pay package worth up to £5.2 million this year as he spearheads the biggest takeover in the insurer's history, it was revealed yesterday.
Mr Thiam has been earmarked shares worth a potential £2.7 million under a rolling three-year incentive scheme, on top of a £900,000 salary and annual bonus windfall of up to £1.6 million.
The insurance giant's annual report shows that its chief executive, who took on the top job last October, is in line for up to 300 per cent of salary in deferred shares from the long-term performance pay plan, which could leave him with stock worth nearly £9 million by 2013.
He is entitled to an additional annual bonus worth a maximum of 180 per cent of salary, of which half must be taken in deferred shares.
Details of Mr Thiam's 2010 pay and bonus deal comes as Pru is embarking on a mammoth $35.5 billion takeover of AIG's Asian arm, AIA.
It will be a transformational deal for the group and one of the biggest overseas acquisitions yet made by a UK company.
But Pru has to get shareholders on board for a $20 billion fund-raising to finance the acquisition in what will mark the largest rights issue yet seen in the UK.
The group is fast-tracking a dual share listing in Hong Kong to widen the net for its record cash-call, which has reportedly met with a lukewarm response from some major investors.
Pru has already allocated Mr Thiam 510,986 shares worth just under £3 million at current prices as part of the three-year incentive scheme.
But to get the maximum amount payable after a three-year vesting period he will have to deliver shareholder returns 20 per cent higher than a peer group of insurers for the next three years.
If he delivers a shareholder return that is 10 per cent higher, he will get 75 per cent of the maximum payout and if the return is equal to peers, he will be entitled to 25 per cent.
Mr Thiam picked up a £1.1 million bonus last year and saw his salary increase from £875,000 to £900,000 on January 1.
Mr Thiam recently backed down over plans to take up an additional board role at French bank Societe Generale after reported shareholder fury.
The plans were said to have drawn heavy criticism from major Pru shareholders, concerned about his time being split during a crucial period for the insurer.
The AIA takeover is a gigantic deal for Prudential, transforming the group into the biggest player in Asia and doubling its size. It is set to release the price and prospectus for its rights issue at the end of the month or early May.