Banking systems vendor Misys has caved in to shareholder pressure and ditched a controversial proposal to offer two senior managers retention bonuses worth a total of £2.4m.
The move came just days before the firm's annual meeting where shareholders were expected to vote against the plan.
Under the proposal, Ivan Martin, head of Misys' banking division, and Tom Skelton, head of the firm's healthcare division, would have received a bonus of £1.2m each to to prevent them from leaving the firm if they are not selected to succeed Misys chairman CEO Kevin Lomax, who plans to become non-executive chairman by 2008.
The Association of British Insurers, whose members control about a fifth of the UK stock market, had issued a 'red-top' guidance on the proposed bonus - its highest level of concern.
In a statement, Misys says it has received support for the plan from several of its major shareholders and has also made amendments to the proposals.
But concerns have been expressed by a number of its other shareholders and, having listened to these concerns, it has decided not to continue with the plan.