Gas shareholders to oppose pay increase

Click to follow
The Independent Online
Shareholders of British Gas are mounting a campaign to overturn the 75 per cent pay rise of its £475,000-a-year chief executive, Cedric Brown.

Shareholder groups, which include pension funds, ethical funds and private shareholders, plan to propose a resolution at the company's next AGM in May which would allow shareholders to vote directly on significant increases in directors' pay.

The move would break new ground in the heightening controversy over large pay rises among senior executives of utility companies. The campaign is expected to be extended to other listed companies.

Some of the shareholders are being advised by PIRC, which offers a corporate governance advisory service to local authority and privatised utility pension funds.

They met in London yesterday to consider a co-ordinated approach to the British Gas issue with the UK Shareholders Association and Professor Lamb, a retired university professor who has initiated a strong campaign against British Gas pay deals.

The PIRC campaign will gather momentum next week when it publishes a statement on behalf of its clients.

Although PIRC refused to comment on the content of the statement, it is thought to be aimed at seeking to overturn Cedric Brown's pay award.

Nick Stevens, the secretary of the UKSA, which now has over 400 members, said: "We are planning to work with PIRC and Professor Lamb. We want to float a resolution at the next AGM, which will propose to change the articles of British Gas to give the shareholders the right to vote on directors' pay."

Proposals to give shareholders a vote on directors' pay were included in the original Cadbury report on corporate governance. But it was put on one side when it came to the final code.

Mr Stevens said: "Clearly it ought to be part of Cadbury Two. Shareholders should be able to vote on all company directors' pay."The Cadbury Committee is due to reconvene in the summer.

Professor Lamb has so far received over 1,200 letters from other angry British Gas shareholders following publication of a letter in the national press last week.

He has been sent £1,200 by correspondents to help finance his campaign.

Professor Lamb and PIRC have arranged to meet investment analysts in London next month.