Advisory firms warn on Murtagh’s pay

ISS, a leading proxy advisory firm, has warned that additional pay rises for Kingspan chief executive Gene Murtagh should only be given in exceptional circumstances.

In a report issued ahead of the insulation panels company’s AGM later this month, ISS acknowledged that the company has performed well but said that a pay rise for Murtagh of 10pc in both 2016 and 2017 was “a cause for concern”. His base salary was €770,000 in 2017. Pay and bonuses at the company have received some attention from shareholders in recent years.

ISS said it believed “qualified support for the remuneration report is considered warranted. This will be kept under review and further increases of this nature will not be looked at favourably unless exceptional circumstances exist.”

However, the report said “a strong mitigating factor is that apart from the last couple of years, the CEO’s salary had been frozen since 2008.

“Further, his new salary is not considered excessive. The continued strong performance of the business is also acknowledged,” it added. ISS said last year that shareholders should vote against a share bonus scheme at Kingspan, the performance share plan (PSP). It was felt the threshold for awarding shares to executives was too low.

However, the scheme has now been changed.

Said ISS: “The annual report discloses that the company engaged widely with major shareholders in relation to approving the 2017 PSP.

“Having listened carefully to shareholders’ feedback, the Remuneration Committee has decided to reduce to 25pc the number of awards that would vest on achieving threshold performance targets for all grants in 2018 and in subsequent years under the policy. Shareholders will no doubt welcome this change.”

Another influential proxy firm, Glass Lewis, said it was in favour of the remuneration report, but added: “We would generally prefer to see smaller incremental increases granted over a longer time frame.”

Glass Lewis is against a proposal to give the board authority to issue shares limited to 39.3pc of the company’s issued ordinary share capital. It said this limit exceeds the 33pc cap set by guidelines.