Pirc joins opposition to Terry Smith's pay rise at Collins Stewart
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By Julia Kollewe, Banking Correspondent

By Julia Kollewe, Banking Correspondent

An investor advisory group has joined the Association of British Insurers in urging shareholders to vote against a bumper pay rise for Terry Smith, the chief executive of the broker Collins Stewart Tullett.

Collins Stewart could face shareholder opposition at its annual meeting on 2 June after Pensions Investment Research Consultants (Pirc), which advises investors on corporate governance, joined its voice to that of the ABI.

Pirc said in a newsletter yesterday: "We recommend opposition to the remuneration report as the bonus scheme is uncapped and remuneration is excessive in our view. The chief executive received a bonus award of £2.9m during the year under review." A PIRC spokesman added that Mr Smith was "one of the highest paid directors last year in the UK".

Mr Smith criticised Pirc for informing the press before it informed the company, saying: "Perhaps Pirc would like to field somebody to discuss this in public." He rejected the criticism of his pay package, saying directors' pay at Collins Stewart was based on stringent formulae calculated to ensure they deliver shareholder value.

The ABI, which represents over a fifth of British companies, has also issued a "red top" alert to its members about Collins Stewart. It criticised the jump in Mr Smith's basic salary from £100,000 to £650,000 last year and the fact that bonuses are not capped, saying that was "not in line with corporate governance best practice".

A Collins Stewart spokesman said Mr Smith's salary had been stuck at £100,000 for 12 years, "way below the industry average," and that the board had decided to bring it into line with that of his peers and executives at Prebon and Tullett who joined the group when their businesses were bought.

Last week shareholders forced Lord Hollick, ex-chief executive of United Business Media, to give up a £250,000 special bonus.