Simon English: Why RSA's chief could have a rebellious time
Friday 03 May 2013
Outlook Just how much trouble is Simon Lee of RSA in? Perhaps the answer is this: more than he seems to realise. The boss of the insurer with the fake Morgan Freeman adverts has been under the cosh ever since he shocked the market, and his own shareholders, by slashing the dividend by a third.
The shares tanked that day, which tells you that RSA made a complete hash of managing the situation. Hacking the dividend in the first place is bad; it coming as a complete surprise is even worse.
Yesterday RSA had some sales figures to report: they were ok. The much bigger issue is the lingering anger felt by the City towards the business, and by extension towards the chief executive.
The company response to questions about this anger was to say that it has been talking to shareholders – good plan! – to "provide more detail on the significant opportunities we see".
This may make up for what the City did not see, but they had better be plausible.
Now, big institutions don't vote against management very often. They make their displeasure known, then they tick the right box, the one that keeps the gravy train moving in the direction of executives and the City funds that manage our pensions (the pensioners themselves not so much).
But it will be very interesting to see what protest vote is registered on item 8 of the agenda at the annual meeting on 15 May. That's "to re-elect Simon Lee as a director". And Item 3, "to approve the directors' remuneration report", might also warrant some attention.
When it emerged that Mr Lee had taken a 32 per cent pay rise to £1.5m, in the very year that the divi fell by the same amount, jaws dropped. One shareholder tells me: "The only reason to hold RSA shares is the divi. You don't buy it for the excitement. People thought they understood this business. We are now looking at it and going, hang on..."
The resentment over Mr Lee's pay is partly attributed to a car-crash interview he gave to The Sunday Times at the start of the year. In it, he complained that his shareholders were "too British" and that "we have very few conviction investors". Some sold – with conviction – upon reading this.
Other revelations in the interview: he likes James Bond, used to play cricket with the former England swing bowler Richard Ellison, and enjoys Coldplay (his greatest crime by far, you might think).
RSA insiders play down talk of a rebellion. One or two investors have "made a bit of noise", but that's that, they reckon.
Maybe. And maybe Mr Lee will be given a chance to put things right.
Still, if you are going to slash the divi, take a pay rise and then complain about your shareholders, you had better be awfully sure that things are going to turn out well.
Ballsy, I'd say.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...