Investor backlash over senior pay ‘not repeated’

There were widespread protests at executive pay deals unveiled last year. Picture: Getty
There were widespread protests at executive pay deals unveiled last year. Picture: Getty
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BRITAIN’S listed companies appear to have heeded the warnings from the “shareholder spring”, with new analysis showing there has been no repeat of last year’s investor backlash against excessive boardroom pay.

Shareholder rebellions last year led to the resignations of Aviva chief executive Andrew Moss and Trinity Mirror boss Sly Bailey, but share registration firm Capita Registrars said no firms have seen their remuneration policies defeated by investors so far this year.

While corporate services director Mark Cleland said a number of groups – including Aviva, Barclays and Prudential – have seen protest votes against their executive pay plans, “it is the minority appealing against the proposals”.

He added: “Without a groundswell of shareholder support, none have carried the day so far.”

Cairn Energy suffered one of the strongest protest votes last year, with more than 67 per cent voting against its executive pay deals amid a row over bonuses for its chairman and former chief executive, Sir Bill Gammell.

In its latest annual report – which showed chief executive Simon Thomson received a remuneration package worth £1.1 million for 2012, up from £867,000 the year before – the Edinburgh-based oil and gas explorer said it “fully appreciated” concerns and this month’s shareholder meeting saw its pay policies voted through by more than 99.5 per cent of investors.

Gammell’s re-election as a director was opposed by almost 6 per cent of shareholders, but that was down from more than 10 per cent last year.

At last month’s Barclays annual meeting, more than 5 per cent of shareholders were opposed to the bank’s remuneration report, down from almost 27 per cent last year. Nearly 12 per cent rejected Prudential’s pay plans, which hiked executive directors’ total packages by 12 per cent to £33m, but that was well below the 30 per cent in 2012.

Cleland said: “Reaction to remuneration packages has been muted. So far, a second successive shareholder spring has failed to materialise.”

He pointed out that the lowest approval rating seen so far this year has been at EasyJet, where only 53 per cent of votes backed plans to pay chief ­executive Carolyn McCall salary and ­bonuses totalling almost £1.99m, up from £1.55m in 2011. However, that protest was led by EasyJet founder Sir Stelios Haji-Ioannou, who along with his family owns just under 37 per cent of the airline.

Capita’s research also shows that the UK’s largest listed firms were going some way towards addressing the gender imbalances on their boards, with women making up one-third of the 27 new directors appointed at FTSE 100 companies.

Cleland said: “At the half-way point in the annual general meeting season, it’s clear FTSE 100 companies are making progress towards meeting the target set by Lord Davies for a quarter of board members to be female to avoid the looming spectre of a quota system being enforced, but it’s a slow process.

“Female appointments are still being outnumbered two to one as boards tread a fine line, balancing boosting female representation with appointing the right candidate for the right role.”