Share­hold­ers rally against ex­ces­sive CEO re­lo­ca­tion fees

The Sunday Telegraph - Money & Business - - Business - By Lucy Bur­ton

BOSSES have been told to wave good­bye to lav­ish re­lo­ca­tion pack­ages as in­vestors ramp up their bat­tle against board­room ex­cess with a clam­p­down on perks.

The In­vest­ment As­so­ci­a­tion (IA), the trade body rep­re­sent­ing Bri­tain’s £7 tril­lion funds in­dus­try, has fired a let­ter out to hun­dreds of com­pany boards out­lin­ing share­holder ex­pec­ta­tions for the next wave of an­nual gen­eral meet­ings.

In a warn­ing to busi­nesses which will be made pub­lic to­mor­row, the IA said it ex­pected com­pa­nies to ad­here to some new rules on top of ex­ist­ing re­quire­ments such as greater trans­parency on bonus tar­gets.

It has called for re­lo­ca­tion pack­ages, which can range from lump sums to ex­ces­sive hous­ing al­lowances, to be dis­closed im­me­di­ately and only be paid for a lim­ited pe­riod.

The is­sue has been a bone of con­tention for some time, with Moya Greene, Royal Mail’s Cana­dian chief ex­ec­u­tive, forced to re­pay a £250,000 perk from the com­pany to help her buy a house in 2013, fol­low­ing an in­ter­ven­tion from the Govern­ment.

Gar­funkel’s owner the Restau­rant Group, en­ergy gi­ant Na­tional Grid and drinks be­he­moth Di­a­geo are among the com­pa­nies to have paid out re­lo­ca­tion pack­ages this year. Na­tional Grid was crit­i­cised for giv­ing its chief ex­ec­u­tive John Pet­ti­grew al­most £500,000 to move to Lon­don.

An­drew Ninian of the IA said: “More of these ben­e­fits are be­ing mis­used.”

He added that share­hold­ers ob­ject to pack­ages that pro­vide an “on­go­ing ben­e­fit” to the bosses who move. The IA, whose mem­bers man­age pen­sions for three quar­ters of Bri­tish house­holds, has also called for an­nual bonus tar­gets to be dis­closed within 12 months of pay­ment so that in­vestors can see the link be­tween pay and per­for­mance more clearly.

The IA re­cently told more than 100 com­pa­nies they will be on a new pub­lic “name and shame” regis­ter af­ter more than 20pc of share­hold­ers op­posed ex­ec­u­tive pay awards – part of wider govern­ment at­tempts to curb ex­ces­sive ex­ec­u­tive pay.

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