Berkeley, Britain's fifth biggest housebuilder, yesterday suffered one of the biggest humiliations at the hands of shareholders in the ongoing row over directors' pay when nearly half of its investors refused to back a £1.2m payout to the managing director.
Tony Pidgley, who also founded the upmarket construction company, saw 47 per cent of shareholders vote against or abstain in a vote on the remuneration report.
Berkeley provoked a row with shareholders when it emerged that it had granted Mr Pidgley £1.2m under a long-term incentive scheme even though he had not actually belonged to it. It was part of the £4.7m Mr Pidgley collected from the company last year.
At Berkeley's annual general meeting, held yesterday, a shareholder called on Mr Pidgley to return the money awarded under the incentive plan, which he declined to do.
The vote is one of the largest rebellions by shareholders against lavish pay awards. The biggest protest came at GlaxoSmithKline's annual meeting, where the majority of shareholders voted down its report on directors' pay.
More than 40 per cent of investors in Shire Pharmaceuticals opposed its remuneration policy and about a third of shareholders in Amvescap, Royal & SunAlliance, Shell and Reed Elsevier registered a protest.
Many institutional shareholders were furious with the retrospective nature of the £1.2m long-term incentive payment to Mr Pidgley.
He was excluded from the incentive plan when it was set up three years ago.
"This was an administrative error and I wish we had not missed it," Mr Pidgley said at the meeting.
The company may have saved itself from an even more embarrassing result in the vote by issuing a conciliatory statement last Friday.
Roger Lewis, the chairman of Berkeley, said: "The board acknowledges that awarding payments to Mr Pidgley as if he had been included within the long-term incentive plan 2000, which he had been left out of, was clearly undesirable and not in accordance with best practice."
The company added that it was reviewing its remuneration policy. Victoria Mitchell, who was appointed chairman of the remuneration committee this June, has been meeting the company's major shareholders after they protested about the incentive plan.
The company said it would also appoint a new non-executive director to bolster the number of independent directors on the board.
Berkeley's shares moved up 12.5p to 864p.
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