Investors are staging revolts over executive pay in a wave of protests that threatens to destabilise the boardrooms of some of Britain’s biggest businesses.
Analysis by The Mail on Sunday shows influential City advisers are urging shareholders to oppose the pay reports at corporate raider Melrose, rat-catcher Rentokil, drug-maker AstraZeneca and insurers Direct Line and Aviva.
Advisers have criticised pay at a further five blue-chip firms – mining giant Anglo American, outsourcer G4S, broadcaster ITV, Paddy Power Betfair and insurer RSA – but stopped short of recommending that investors vote against their remuneration reports.
Persimmon enraged investors by awarding Jeff Fairburn a bonus worth more than £100m
The shareholder rebellions follow Prime Minister Theresa May’s crackdown on excessive boardroom pay, which she called ‘the unacceptable face of capitalism’.
The Investment Association will soon announce it has added a further eight companies to its register of businesses where there is more than 20 per cent dissent over rewards.
New entrants to the list of shame include Persimmon, the FTSE 100 housebuilder that enraged investors by awarding chief executive Jeff Fairburn a bonus worth more than £100million.
Following a backlash earlier this year, the firm cut the bonus by £25million and Fairburn pledged to donate an unspecified amount to charity. Chris Cummings, chief executive of The Investment Association, said investors are ‘flexing their muscles and holdings businesses to account’.
He added: ‘A strong signal is being sent to boardrooms that investors won’t tolerate rewards that are out of line with company performance.’
Another firm in the firing line is Melrose, the company behind the £8billion hostile takeover of engineering giant GKN. The four top bosses each pocketed more than £42million last year, boosted by payouts under long-term incentive schemes.
Glass Lewis, a leading shareholder advisory firm, said the bonuses were ‘excessive’ and urged investors to block the remuneration report at Thursday’s annual meeting.
Advisory firms Pirc and ISS flagged up concerns about AstraZeneca’s bonus scheme, which boosted chief executive Pascal Soriot’s most recent total pay package to £9.4million. ISS said the bonuses ‘do not appear to be suitably aligned with performance’. About 40 per cent of shareholders rebelled against the company’s remuneration report in 2017.
There are also red flags over the pay packet for Direct Line’s new finance chief, Penny James. Her £675,000 base pay is 37.5 per cent higher than her predecessor’s.
Investor group Pirc slammed bonus plans for Rentokil’s £4.4 million-a-year chief executive Andy Ransom as ‘excessive’.
FTSE 250 bookmaker William Hill, where the £600,000 base salary for chief executive Philip Bowcock is nine per cent more than his predecessor’s, has also come under attack.
Satellite firm Inmarsat was the first major firm to suffer a pay defeat this year when almost 60 per cent of investors rejected its pay report last week.
Luke Hildyard, director of the High Pay Centre, said: ‘Shareholders should be standing up for fairer, more proportionate pay practices at company meetings.’