London Electricity pay deals under fire: Shareholders urge executives to call a halt

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The Independent Online
HIGH executive salaries and lucrative share options came under attack at London Electricity's annual meeting yesterday.

One shareholder described the deals as 'repugnant' and called on Bob Reid, the chairman, to call a halt to the payouts.

The shareholder cited a pounds 516,000 profit on options made by the former chairman, John Wilson, and said: 'Will you put the brakes on please?'

Another shareholder attacked the way pay is decided by a committee of non-executive directors whose pay, in turn, is decided by executive colleagues.

'We are all human. If they pat each other on the back how can we be sure that they are independent and unbiased? If I do you a favour then you do me a favour,' he said.

Sir Bob, who is also the chairman of British Rail - now hit by strikes by the RMT union - replied: 'I have been saying that to Jimmy Knapp for the last few weeks.'

Sir Bob then launched a staunch defence of London Electricity's pay policies. 'Remuneration packages are absolutely key to motivation and they must be competitive,' he said.

'In this country there is a dearth of management and a surplus of predators and headhunters. You have to pay enough to keep good people and keep them motivated.'

Sir Bob defended the system of non-executive remuneration teams. 'You cannot expect God to make your decisions for you,' he said.

Leslie Priestley, chairman of London Electricity's remuneration committee, said that decisions were taken using comparisons with other companies, many of which are outside the electricity sector. He said that London Electricity was by no means near the top of the salary league.