Unilever faces shareholder revolt over executive pay
UNILEVER faces a stand-off with shareholders over executive pay next month, after two influential shareholder advisory firms urged investors to reject the consumer goods giant’s proposals.
Unilever is attempting to swap its ‘base salary’ for a consolidated ‘fixed pay’ structure, which would mean it could hand larger pay rises and bonuses to its executives. Chief executive Paul Polman, for example, would receive up to 23pc more in bonuses and shares under the new pay scheme in 2018, taking the amount he could receive up to €11.2m (£9.7m). He would also be given a 5pc hike in total fixed pay, including salary and benefits.
Institutional Shareholder Services (ISS) warned that support for the pay policy was “unwarranted”. While Unilever’s efforts to simplify its pay structure were likely to be “welcomed by shareholders, the principal concern raised is that it comes at a price”, it said.
Shareholder advisory firms were, however, split on whether to recommend Unilever’s pay packages for 2017. The ISS recommended shareholders back the proposal, while the advisory service run by the Investment Association issued a red-top warning. This warning is its most severe recommendation against a company’s plans. It did not comment on why it had given the proposal a red top. A shareholder revolt at the May meeting would come just weeks after Unilever faced heavy shareholder criticism over its decision to abandon its double-headed structure.
One of its largest shareholders, Columbia Threadneedle, which owns a 1.5pc stake in the UK arm, had said it was “disappointed” about the “lack of engagement with shareholders” over the decision to chose the Netherlands.