Unilever fights to quell a rebellion

Chief executive faces humiliation over pay and plan to move firm to the Netherlands

UNILEVER’S boss faces a humiliating shareholder revolt over lavish pay proposals and a decision to ditch its UK headquarters.

Paul Polman, 61, is set for a showdown with investors on Wednesday at the company’s annual general meeting.

Unilever is trying to push through controversial changes which could see the £11.6ma-year chief executive handed even more cash. The company, which makes Marmite and Dove soap, is also fighting to quell a rebellion against the decision to scrap its Anglo-Dutch structure.

The consumer giant has kept joint headquarters in London and Rotterdam for 89 years but the overhaul would see the Dutch city named as its sole headquarters. That has concerned shareholders because it could put its prized listing on the FTSE 100 index at risk – something Unilever bosses are scrambling to protect.

A spokesman for the company yesterday said it remained in talks about the restructure.

The firm has also defended its pay proposals, claiming they will make the rewards of executives simpler and require them to buy more Unilever shares. Votes on the pay changes are due to be held on Wednesday in London and Thursday in Rotterdam, amid growing speculation the firm could lose. Moving the headquarters is expected to be put to a vote by the end of summer. The pay plans prompted the Investment Association to issue its most stern warning, a so-called ‘red-top’ alert, to shareholders. Influential advisory service ISS has also waded in, urging investors to reject the pay overhaul. The changes would see executives’ base salary, benefits and allowance lumped into a single ‘fixed-pay’ figure.

But ISS said that meant percentage increases to the fixed figure in future would lead to a bigger final figure than if the components – salary, benefits and allowance – had each been increased separately.

Because bonuses would be calculated as multiples of the fixed pay, it warned those could get bigger more quickly as well.

Polman’s proposed pay for 2017 is already being increased by 40pc to £11.6m, while finance chief Graeme Pitkethly will take home £3.1m – a 50pc increase on 2016.

That was despite Unilever missing expectations for sales growth last year, ISS said, which raised ‘some questions about the operation of the scheme’.

However, it welcomed proposals for long-term incentives which would encourage executives to invest up to 67pc of their bonuses into the company to get the maximum amount.

Unilever said the pay changes already apply to 3,000 of its top executives and it was only seeking to use the same approach with Polman and Pitkethly.

The company said the policy is ‘ simpler, longer term and requires greater personal commitment through share ownership to drive reward’.

Meanwhile, the company has been meeting with its top investors to allay concerns about its proposed move to Rotterdam.

Unilever says only a small number of its 7,300- strong UK workforce will be affected and that it would keep its primary listing in London.

Columbia Threadneedle, one of Unilever’s top-ten shareholders, has accused the firm of not giving enough convincing reasons for the change.

A Unilever spokesman said it had spoken ‘extensively’ with shareholders about the restructure.