Carillion executives have 14 months left to double the group's share price and cash in on a lucrative share plan.
About 120 executives and senior managers, led by chairman Sir Neville Simms, will bag millions if Carillion's shares reach 276p by next October, in one of the most lavish bonus schemes in construction.

But they face an uphill battle – the contractor's share price has fallen 35% from its 2001 high of 208.5p in early April. It is now 135p.

The Founder's Equity Plan, signed in October 1999, allowed executives to buy up to a year's salary-worth of shares. Under the deal, if Carillion's share price doubled within three years from 138p, managers would get four free shares for every one invested. Shares must rise by 10% a year to trigger the deal – any increase above 10% but below the 276p target will see investors rewarded on a pro-rata basis.

Simms invested his full salary of £340,000 stands to collect £3.4m if the share price tops 276p.

Of the major contractors, Carillion has been hardest hit by a change of mood in the City in the last three months. Investors have taken a cautious approach after a series of notes from analysts casting doubt on companies' prospects.

Amec, Laing, Balfour Beatty, Kier, Mowlem and Morgan Sindall have dropped in value after peaking in May and June (see table below).

Carillion's share price has suffered because it looks likely to miss City forecasts for an interim pre-tax profit of £47m by £2m. Other factors are the £2m loss predicted on a contract in Wales and uncertainty over the earning potential and political viability of PFI projects.

Mike Foster, construction analyst at stockbroker Granville Baird, said the fall in share values had been on the cards after their large increases earlier in the year.

Analysts also believe that Laing's continuing problems at the National Physical Laboratory at Teddington, west London, have awakened memories of what can go wrong. Laing is expected to lose at least £40m.

One analyst said: "Laing's handling of a number of contracts has terrified investors into believing that other companies will be reporting huge losses."