The Association of British Insurers has issued regeneration specialist Berkeley Group with its most severe corporate governance warning.

The “red top” warning is comparatively rare and flags up serious investor concerns. It has been issued in response to the group’s proposed incentive scheme for senior management.

The scheme put forward by Berkeley’s senior management would see the return of £1.45bn to shareholders over six years, with the management receiving 15% of the scaled-down company.

This would result in Tony Pidgley, the company’s founder, and three other senior managers being given a share of £100m. Pidgley’s interest in the company would increase from 1.66% to 8%.

The ABI is concerned that the management has not demonstrated how the extra remuneration is linked to value.

The insurers’ association also criticised the management’s lack of communication to shareholders. At least one top-five shareholder is still opposed to the proposal, which will be voted on in September.