The British Gas annual meeting tomorrow could turn out to be unprecedented in UK corporate history. Trade unions and political parties are hiring coaches to transport shareholders to the meeting, while tabloid newspapers are sponsoring their own coaches and advertising planned routes so people can join them along the way.
Attention will focus in particular on a resolution sponsored by Pensions Investment Research Consultants to reverse the pay increase given to Cedric Brown, the chief executive, last ovember. He receives a basic salary of pounds 475,000 plus an annual allocation of shares worth up to 125 per cent more. If he gets his full bonus, Mr Brown can take away more than a pounds 1m a year.
The name Pirc is not likely to be recognised by the man in the street. Anne Simpson, the 37-year-old joint managing director, says the consultancy was set up in 1986 to advise trustees and investment administrators of pension funds run, mainly, by left-wing local authorities, many of them concerned about the apparent lack of ethics in the City.
Ms Simpson, an Oxford graduate and former fellow at Massachusetts Institute of Technology, works alongside her co-managing director, Alan MacDougall, a pension fund administrator at the GLC and former director of a GLC think- tank on City matters.
"At first we were seen as going against the trend," Ms Simpson says. "The City was making a lot of money and nobody wanted to hear about corporate governance."
With the recession and several high-profile company failures, the perception has changed, she says. These days, people come from around the world to attend Pirc's annual conference at the Royal Society of Arts. "We were perhaps slightly ahead of our time, but demand for our service is growing," says Ms Simpson.
Pirc monitors compliance with corporate governance standards, ethics and environmental issues.
Ms Simpson rejects accusations levelled by British Gas that it has been unfairly singled out. She says she is quite prepared to pick on anyone, but "you can only have one major campaign a year as they are so demanding."
Pirc has a long list of completed campaigns. Examples include the 1993 attack on the industrial conglomerate,Hanson, which sought to "streamline" its annual meeting. Pirc successfully objected, claiming the plans took power away from shareholders.
Due to Pirc's efforts, Yorkshire Water was recently forced to appoint a consumer representative to its board.
The left-wing affiliations have been a problem for Pirc and several City clients refuse to allow their identities to be revealed. Others are interested in the corporate governance service Pirc provides, but are often restricted in what they do or say publicly because many of their own stockbrocking or corporate finance clients are among Pirc's targets.
Clients include the pension funds of British Rail, Cleveland County Council, Camden, Merseyside and Hackney local authorities and the city of ew York fund. City clients include BZW. Total funds under management by Pirc clients are about pounds 70bn.
Pirc is a private company, but reinvests profit and pays no dividend. Ms Simpson and Mr MacDougall get pounds 33,000 a year each. There are about 15 staff, mostly involved in research.
Whatever happens to the votes at the AGM, one thing appears certain; there has been a quantum shift of power away from the boardroom to shareholder lobby groups such as Pirc.
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