Clarkson shareholders rebel over executive pay
SHIPBROKER Clarkson is the latest company to be caught up in investor anger over excessive executive pay, suffering a major shareholder rebellion.
The FTSE 250 company got a bloody nose at its annual meeting on Friday, with 26pc of the votes cast going against the remuneration report, and the same level of opposition to its remuneration policy.
Clarkson’s annual report shows that chief executive Andi Case – a highly respected figure in the shipbroking world – received pay and bonuses totalling £3.7m in 2016. Of this £550,000 was basic salary and the vast majority of the remainder – some £2.9m – was his annual bonus.
Both Mr Case and Clarkson’s chief financial officer and chief operating officer have no formal cap on the size of their annual bonuses.
In its annual report, the shipbroker justifies this, saying it is “in line with Clarkson’s peers”, adding the policy “encourages the maximisation of profit, and ensures that executive directors are aligned with all stakeholders”.
Shareholder advisory group PIRC recommended investors oppose both the remuneration report and policy, citing concerns about there not being a limit on the maximum bonus.
PIRC also flagged up concerns about the chief executive’s base pay, which it said was in the upper quartile of comparable businesses, and added that the bonus “at 552pc of base salary is considered highly excessive”.
Last year Mr Case – who has been with the company for over a decade and at the helm since 2008 – navigated Clarkson through choppy markets to deliver revenues of £306m, a £5m increase, while profits swelled by £15m to £47m.
Sources close to Clarkson said that the business competes with mainly privately held rivals, where pay is higher and not subject to such scrutiny, and the shipbroker needs its current pay structure to retain key staff.
In a statement, Clarkson said although the pay resolutions were passed, the directors “noted” the scale of the rebellion, adding they “have engaged with major shareholders in order to fully understand their concerns”.