Rebels give BG a shock over pay

BG Group faced a rebellion against boss Helge Lund’s massive pay deal after nearly one in five shareholders at the oil and gas giant’s annual meeting refused to back its remuneration report.

Chief executive Lund, who joined the company on February 9 from Norway’s oil giant Statoil, could be in line for a pay and perks package of £25-£31m if he meets every condition of his bonuses and long term share awards.

The group’s AGM, held at Reading’s Hilton Hotel yesterday, also HEDGE fund manager Man Group could face an investor backlash at its AGM on Friday. Advisory firm Institutional Shareholder Services (ISS) is recommending that investors oppose its three-year remuneration policy and pay report, in what could be one of the most substantial protests of the 2015 annual meeting season. revealed more than 15pc did not back the re- election of Sir John Hood as chairman of its remuneration committee.

BG, which is in the process of being bought by Royal Dutch Shell in a £47bn deal, offered no apology for Lund’s ‘excessive’ pay, despite calls by shareholders.

Mark Bentley, a director at shareholder group Share-Society, who also represents a group of small shareholders from Germany called DSW (Deutsche Schutzvereinigung für Wertpapierbesitz), said: ‘I think the remuneration committee has let shareholders and UK Plc down in agreeing this massive package.May I request an apology?’

Bentley’s question raised a round of applause from the room and chairman Andrew Gould admitted the group misjudged the public reaction but did not apologise.

The protest vote is particularly large despite suggestions that some opposition had subsided following Shell’s offer for the company and the subsequent rise in the shares. DSW criticised Lund’s package and said the potential remuneration payable is ‘excessive’.

It added: ‘The proposed takeover is likely to take place early next year, so Lund will receive one year’s salary, pension and benefits, he will also be eligible for a bonus payment of up to 200pc of salary. Upon change of control he will receive a further 12 month’s salary, pension and benefits.’

Bentley told the Mail: ‘ How can this be justified? The Shell bid had nothing to do with him and was completely out of his control.’

BG initially faced shareholder activism after it revealed the pay package of the former Statoil boss in October. The board reduced the expected value of Lund’s initial share award from around £10m to closer to £4.7m in December. But shareholders are still unhappy at the overall size.

The £47bn offer by Shell to buy BG last month could mean that Lund’s package is valued at up £31m. Lund, who has been boss for 12 weeks, said he had ‘ mixed emotions’ over the offer by Shell and said a takeover was not on his mind. Shell’s takeover bid, first raised in a mid-March phone call between Shell chief executive Ben van Beurden and BG’s Gould, was announced on April 7.

DSW and ShareSociety were also unhappy with other payments at BG including for chief financial officer Simon Lowth.

Nearly 18pc of voting shareholders opposed BG’s remuneration report and more than 13pc voted against the re-election of Hood taking the total to 19.5pc and 15.5pc when counting the number of votes withheld. All resolutions were passed. Hood has already faced shareholder activism at advertising giant WPP. He became chair of its remuneration committee in January last year. WPP has suffered pay backlashes due to the millions paid to founder and chief executive, Sir Martin Sorrell.

BG (up 10p to 1197p) said the final package that Lund will receive is yet to be worked out and approved.