Melrose four fail to meet deadline over pay revolt

Firms on ‘list of shame’ snub shareholders

CORPORATE raiders at Melrose have failed to meet a deadline to address shareholders’ concerns over their huge bonuses.

The FTSE 100 company, which controversially bought engineer GKN this year, is one of a handful of London-listed companies found by The Mail on Sunday to have flouted guidance set out as part of Theresa May’s crackdown on fat cat pay.

Earlier this year, The Mail on Sunday revealed that the four top Melrose executives – Christopher Miller, Simon Peckham, David Roper and Geoff Martin – could pocket as much as £285 million if its controversial £8 billion takeover of GKN proves a success long-term.

The scheme, which would pay out in 2020, is controversial because there is no cap – similar to the one handed to Jeff Fairburn by housebuilder Persimmon.

The Public Register, dubbed the ‘list of shame’ because it exposes companies that have faced shareholder revolts over excessive executive pay, says firms must respond to investor concerns ‘no later than six months after the vote’. However, Melrose, asthma specialists Circassia Pharmaceuticals, Rus- sian miner Petropavlovsk and Russian property i nvestor Raven Property Group have all failed to address t heir r espective pay revolts, more than six months on.

Last year, Melrose’s top four executives each pocketed £40 million after a separate five-year bonus plan paid out. Peckham, the chief executive, told this newspaper earlier this year: ‘We’re rewarded by the value we create. If we don’t create any value in the enlarged Melrose then we don’t get anything. I’m not saying we don’t get paid well. We do. But we only get paid if we perform.’

Around 23 per cent of Melrose’s shareholders voted against the remuneration report at the annual meeting on May 10.

Before then, the company had said it intended to ‘review the existing Melrose remuneration arrangements and expects to consult with shareholders in the coming months’. But it has yet to publicly reveal t hose plans more t han seven months after the vote. The Investment Association, the trade body which was tasked by the Government with compiling the register, says companies should respond by publishing an update with ‘views received from shareholders and actions taken by the company’ within six months.

While the guidance is currently only advisory, from next year it will be compulsory for firms to respond to such shareholder rebellions under the new UK Corporate Governance Code. A vote of more than 20 per cent against is seen as a revolt by shareholders.

A fifth of Circassia’s investors objected to an 80 per cent rise in the pay of chief executive Steve Harris to £825,000.

Petropavlovsk saw the largest pay revolt this year as 71.5 per cent of its shareholders rebelled over the pay of former chief executive Roman Deniskin. However, Deniskin was simultaneously overthrown from the board in a tussle with rebel investors along with other management. The company said its new remuneration committee ‘has noted the concerns of shareholders and are aware of their concerns and will take these into account in making any decisions.

Melrose and Raven declined to comment. Circassia did not respond.