Stage­coach on track for fiery AGM clash over ex­ec­u­tive pay

The Sunday Telegraph - Money & Business - - Business - By Oliver Gill

STAGE­COACH, the trans­port gi­ant, is braced for a fiery AGM with its calami­tous han­dling of the East Coast rail fran­chise fresh in the mem­ory of share­hold­ers.

Glass Lewis, the in­flu­en­tial proxy ad­viser, has urged in­vestors to vote against ex­ec­u­tive pay pack­ets on Fri­day. Ri­val ad­viser ISS pro­vided only “qual­i­fied sup­port” for Stage­coach’s re­mu­ner­a­tion re­port. The re-elec­tion of Sir Brian Souter, the Stage­coach co-founder, as chair­man was also red-flagged by the proxy duo and fel­low ad­viser PIRC.

PIRC told share­hold­ers to vote against Mr Souter’s re-ap­point­ment. Glass Lewis and ISS gave qual­i­fied sup­port, how­ever, on the ba­sis that an in­de­pen­dent deputy chair­man is in place.

But, ISS wrote: “In­vestors may ex­pect the com­pany to dis­close in more sub­stan­tive de­tail as to why it con­sid­ers this ar­range­ment to con­tinue to be in the best in­ter­ests of share­hold­ers.” Glass Lewis “strongly be­lieved” a fully in­de­pen­dent chair­man should be sought.

Chris Grayling, the Trans­port Sec­re­tary, na­tion­alised the East Coast line in June. Stage­coach, a 95pc owner of the fran­chise, took an over­all fi­nan­cial hit of more than £200m as a re­sult.

Martin Grif­fiths, the chief ex­ec­u­tive, was later stripped of a six-fig­ure bonus. Glass Lewis said Stage­coach’s pay plans did not pass muster as it had “not dis­closed its ra­tio­nale” to lower earn­ings per share tar­gets that will trig­ger bonus pay­outs. Stage­coach ad­mit­ted some “in­di­vid­ual agen­cies have some par­tic­u­lar long-stand­ing per­spec­tives that we are un­likely to sat­isfy fully”, be­fore adding: “Our ex­ec­u­tive pack­ages and ob­jec­tives are specif­i­cally de­signed to prop­erly re­flect un­der­ly­ing per­for­mance and en­sure clear align­ment with the in­ter­ests of share­hold­ers.”

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