Oil and gas exploration firm BG Group is facing growing opposition over plans to pay its new boss up to £14 million a year plus a £15m “golden hello” ahead of a shareholder meeting to approve part of the package.
Helge Lund is to take over next year after ten years in charge of Norwegian energy giant Statoil, with his appointment following the departure of Chris Finlayson as BG chief executive earlier this year, just 18 months into the job.
BG said Lund was “ideally suited” for the role given his track record, skills and experience. It said his pay package was competitive within the oil and gas sector.
His award is subject to approval by a special meeting of shareholders in Reading on 15 December. Proxy voting agency Institutional Shareholder Services has called on investors to vote against. It said: “The company states Helge Lund might not join BG if this resolution is voted down by shareholders. But the alternative also has implications.
“Support for this proposal could encourage incoming executives to negotiate rewards which are outside the scope of the formal remuneration policy and make shareholder approval a condition of their employment, on the assumption shareholders are unlikely to vote down the proposal.”
The Investment Management Association’s voting advisory service has given BG’s plan a “red-top” notice.
BG announced Lund’s appointment last month and two weeks ago said shareholders had “overwhelmingly welcomed the appointment” but – following feedback – had tweaked his bonus package to strengthen its link to performance.
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