Stagecoach on track for fiery AGM clash over executive pay
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.”