£2.5m Cairn Energy shares windfall withdrawn amid shareholder pressure
Tuesday 24 January 2012
A £2.5 million shares windfall for the founder of oil explorer Cairn Energy was withdrawn by the company today amid shareholder pressure.
Sir Bill Gammell, the former Scottish international rugby player, was due to receive the options as reward for helping to bring about the company's 5.5 billion US dollar (£3.5 billion) sale of its Indian operations last year.
A week before shareholders were due to vote on the payment, Edinburgh-based Cairn said it had pulled the resolution in the wake of discussions with several institutions. It now plans further talks with shareholders.
The move comes a day after Business Secretary Vince Cable outlined plans to address the growing controversy over executive pay, including by offering shareholders a binding vote on remuneration policies.
Sir Bill founded the business in the early 1980s and was chief executive from the company's stock market listing in 1988 until June last year, when he became non-executive chairman. He was awarded a knighthood in 2006 for services to industry in Scotland.
Explaining its decision to award the shares, Cairn told shareholders that Sir Bill was involved in "extensive and rigorous negotiation" to bring about the Indian sale to Vedanta Resources.
The disposal is due to generate a return to shareholders worth 3.5 billion US dollars (£2.5 billion), which will still be the subject of a vote next Monday.
As part of the incentive scheme, Cairn also planned to make a £1 million donation to charities nominated by Sir Bill. He was entitled to receive £1.4 million on stepping down as chief executive.
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