The energy giant BG Group will meet its key investors over the next few days in an attempt to see off the revolt over a £12m “golden hello” for its incoming chief executive, Helge Lund.
The move came as the influential advisory bodies Pirc and the US-based Glass, Lewis joined critics of the pay package yesterday, urging investors to vote it down.
Senior figures at the company will speak to shareholders amid growing fury over the award, which the Business Secretary Vince Cable described as “excessive” this week as he urged fund managers to reject it at an extraordinary meeting on 15 December.
Mr Lund, who is credited with turning round Norway’s Statoil, joins BG on 2 March and could also earn up to £14m a year in pay, including a £1.5m base salary. Overall, he could be paid £84m by 2020 if he hits performance targets.
BG is understood to have no plans to negotiate but will instead try to convince investors that Mr Lund is worth his annual pay and the one-off payment, which will be spread over five years and paid in shares.
Four of BG’s top 15 institutional investors have already warned that it is facing a huge revolt at next month’s meeting. Pirc said: “In [our] view, such an excessive award could be seen as a ‘golden hello’ award as it grossly exceeds the maximum limits set in the existing policy.”
The governance adviser Institutional Shareholder Services (ISS) is also urging investors to revolt.
New rules introduced by Mr Cable have made a shareholder vote on pay both compulsory and binding.
A BG spokesman said: “We believe Helge Lund is the right person to lead BG Group. His proposed remuneration is competitive in the international oil and gas industry. The shareholder vote on Helge Lund’s pay is in line with the letter and spirit of corporate governance legislation.”
ISS said that an “oppose” vote was justified because the payment falls outside the scope of BG’s approved remuneration policy.
The deal was also criticised by the Railways Pension Scheme. Deborah Gilshan, its corporate governance counsel, said: “Railpen will not be supporting this pay package as we do not consider it is in the long-term interests of our beneficiaries and we are now calling on the fund management industry to consider the long-term interests of their clients by voting against this.”
Simon Walker, the director-general of the Institute of Directors, has also condemned the package as “astronomical” and “simply excessive”.
Writing in the Evening Standard yesterday, Mr Walker said: “The proposed deal is representative of much that is wrong with corporate Britain. “Mr Lund is an inspirational leader, and has done wonders with his current company, Statoil, but his proposed pay deal is excessive and inflammatory.”Reuse content