Big guns will put down gas shareholders' revolt
Sunday 28 May 1995
But it is likely to be a pyrrhic victory. Richard Giordano, the non-executive chairman, will be given a rough ride by thousands of irate shareholders at what could be the largest and rowdiest AGM ever held by a British company. Support from some quarters is so lukewarm that British Gas may eventually have to back down on its pay policy anyway.
Mr Giordano has visited at least 60 institutions to secure their support against two resolutions attacking directors' pay. In some cases he has told fund managers that a vote in favour of the resolutions would be a vote of no confidence in the board. The Association of British Insurers has advised its members to support the management as a matter of principle.
But although many institutions have promised to back the company, many more are abstaining or have offered only qualified support. Standard Life, for example, has said it will support the company but wants to see the remuneration package changed within the next year. The National Association of Pension Funds, which represents the pension fund managers, has advised its members to vote but has refrained from saying which way.
British Gas caused outrage among small shareholders earlier this year by revealing a new pay policy for directors which included a 70 per cent salary rise for Cedric Brown, the chief executive, to a basic pounds 475,000. Shareholders and consumers saw the increase as excessive for a public utility, particularly at a time when it was making thousands of redundancies. But Mr Giordano, the architect of the new pay policy and who himself earns more than pounds 400,000 from British Gas, has refused to back down in what is widely seen as a public relations disaster.
Following the outcry, nearly 7,000 of the company's 1.8 million private shareholders from all over Britain have said they will come to the meeting at the London Arena in Docklands.
Two critical resolutions are being put forward. One calls for an independent consultative body within British Gas to represent shareholders. The other, sponsored by Pensions & Investments Research Consultants (Pirc), demands that the company follows "best practice" in its remuneration policy. Cedric Brown is also up for re-election.
Both resolutions are likely to win on a show of hands among the small shareholders. They will probably then be defeated in a card vote when proxy votes from institutions are counted.
But even if the management wins the vote, many institutional investors believe the company will have to back down afterwards. "In some sense, Pirc has won even before the vote," said one institutional investor. "The whole thing has become an issue and can no longer be waived through as British Gas had hoped. I don't think the issue will go away - and it is not just a British Gas issue."
- 2 Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
- 3 Andy Murray takes to Twitter to show off his Christmas jumper
- 5 Top 10 travel destinations for 2015: From Haiti and Alaska to Namibia and Iceland
PlayStation and Xbox hacked by Lizard Squad
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
Dublin court rules brain-dead pregnant mother's life support can be switched off
Margaret Thatcher 'expressed fears of Asian rising' at Anglo-Irish summit in 1984
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...