The giants shamed by shareholders

Investor fury spreads as BP loses vote over fat cat pay

THE BOARDS of some of Britain’s biggest companies are braced for a wave of investor anger – following the staggering revolt over executive pay at oil giant BP.

Nearly 60pc of investors voted against BP chief executive Bob Dudley’s £13.9m pay and perks package making the FTSE 100 energy firm the first swallow of a new shareholder spring.

And the move against pay and management decisions seemed to be growing.

Mining titan Anglo American and Stock Spirits yesterday became the latest to face unrest.

Polish vodka maker Stock Spirits Group is facing a plan from shareholders to oust chief executive Chris Heath, and major shareholder Franklin Templeton has now supported the move. The row revolves around the way the company has lost market share in Poland and how the general poor performance of the firm.

Shareholder group The UK Individual Shareholders Society (ShareSoc) then announced its opposition to executive pay at Anglo American.

Roger Lawson, deputy chairman at ShareSoc, said it considers the £3.4m pay of chief executive Mark Cutifani as ‘too high’ particularly in a year when the company suffered a loss of £4bn in 2015 and dividends were suspended.

He said: ‘The market cap of Anglo has shrunk from £50bn in 2008 to £8bn. However, chief executive remuneration has not been reduced to reflect the smaller simpler company that Anglo now is. The chief executive is still anticipated to receive £6.3m for target performance and £8.8m for “above” target performance.’

Yesterday, builder Persimmon Homes became another victim of shareholder ire as investors questioned the independence of a new non-executive director at its annual general meeting in York.

The firm had wanted to appoint Nigel Mills, a senior advisor at Citigroup, a bank which is also the housebuilder’s broker.

Mills scraped through with just 52.3pc of shareholder votes.

In response, Persimmon said it would engage with investors and explain its reasoning. Bosses said they ‘strongly’ believed he was independent, adding that he had not worked on the company’s business in the previous three years.

Chief executive Jeff Fairburn’s £2m package was waved through with just 8.6pc of votes cast against, although Mark Bentley of campaigning investor ShareSoc said there was more to his remuneration than met the eye.

Its research suggested Fairburn could be in line for £50m of shares under the firm’s long-term incentive plan, he said.

Bentley said: ‘This pay package isn’t fair and it isn’t really in shareholders’ interest either.

Nurofen maker Reckitt Benckiser, drugs group Astra Zeneca and media giant WPP are all expected to be confronted by angry investors at meetings over the coming weeks.

The public shaming of fat cat pay in the City is regarded as a new shareholder spring, a nickname first used for the pay revolts in 2012.

A series of shareholder rebellions claimed the scalps of chief executives including Aviva’s Andrew Moss.

Simon Walker, the director-general of the Institute of Directors, said: ‘The shareholders have spoken, and BP cannot shrug off this significant expression of disapproval with the pay package.

‘British boards are now in the last chance saloon. If the will of shareholders in cases like this is ignored, it will only be a matter of time before the Government introduces tougher regulations on executive pay.’