Drinks chief's ?2m payday cheer

Philip Bowman, chief executive of the drinks group Allied Domecq, banked £2m in the past year after a bonus scheme produced a cash payment of more than £1m.

Mr Bowman's total remuneration package catapults him into the top echelons of the UK pay league. Mr Bowman, 50, who joined the company in 1998, received basic pay of £665,000 - a 9% increase on 2002 - and a pension allowance of £279,000. His £1,035,000 performance bonus, however, more than doubled his rewards.

Mr Bowman's total pay package was just over £2m - up from £1.6m in 2002. A spokesman for the company explained that Allied - whose drinks brands include Ballantine's, Beefeater, Malibu, Mumm and Montana wines - had operated an "extended closed period" while the company was involved in wrangling over former Seagram brands with rivals Diageo and Pernod Ricard.

"Because Chris Hogg [the former Allied chairman] decided the company was in closed period, no share incentives could be awarded," the spokesman explained.

Those losses have now been covered with a cash payment designed to make up for the gains Mr Bowman would have received if he had been awarded incentive shares. The wines division boss David Scotland received a bonus of £507,000, taking his total pay to £1m. Finance director Graham Hetherington's total pay was £928,000.

Allied's profits rose 3% to £495m, but were hit by currency fluctuations and extra pension costs.

Details of Mr Bowman's bumper payday, contained in the 2003 annual report and accounts just sent to shareholders, came as the financial services authority warned insurance company bosses against linking their pay - and that of their employees - to short-term sales targets.

David Strachan, a director at the City regulator, said that insurers should be careful that pay structures did not focus too much on sales and not enough on sustainable profit.

"Profit and sustainability tend to play second fiddle to sales and market share," he said. "Firms could and should do more to impress upon their staff the need for financial discipline, making sure the noises coming from the boardroom are consistent with flourishes of the underwriter's pen.

"As part of this, I wonder how much consideration is given by boards to remuneration structures, especially bonuses, and whether they create the right incentives for sustainable profitability," Mr Strachan said at the annual conference of the Institute of Economic Affairs.