Bloody day for boards as shareholders revolt

Severn Trent, BT and Experian faced anger at their AGMs

There were raised temperatures at a trio of annual general meetings yesterday, as bosses at Severn Trent, BT and Experian faced fed-up shareholders.

At Severn Trent, 5 per cent of shareholders voted against pay policies designed by new boss Liv Garfield. In a further blow for the former chief of BT’s Openreach division, 5 per cent of shareholders voted against her appointment.

Pensions & Investment Research Consultants (Pirc), the advisory group which examines company’s pay awards, said the water utility’s new pay policies were “considered to be excessive”.

Ms Garfield’s basic annual salary of £650,000 is 16 per cent higher than the salary of her predecessor, Tony Wray. She was also awarded £2.4m in shares when she joined Severn Trent earlier this year.

“Awards granted have previously been capped at 70 per cent of salary for the chief executive. However, these have been greatly increased to 125 per cent for the newly appointed chief executive,” Pirc pointed out.

There were also heated exchanges at Ms Garfield’s old employer, BT where Pirc had ignited shareholder ire with criticism of chief executive Gavin Patterson’s pay and described its bonus scheme as “highly excessive”. BT changed its bonus scheme when Mr Patterson succeeded Ian Livingston last September.

Pirc recommended investors vote against BT’s future remuneration policy because Mr Patterson could earn £7.4m if he hits targets, making his package worth up to 740 per cent of base salary.

Tony Hall, the former BSkyB boss who chairs BT’s remuneration committee, said in the annual report that the changes meant Mr Patterson’s pay would be significantly reduced for average performance compared to when Mr Livingston was in charge, but he admitted the maximum bonus was only “reduced slightly”.

Last year the remuneration report was backed overwhelmingly. Yesterday’s shareholder revolt saw about 7 per cent vote against it.

During an extended and rowdy AGM, shareholders also turned on BT’s board with complaints about the company’s poor customer service. Spontaneous applause broke out after a shareholder suggested BT should move its customer service operations back onshore.

One observer noted that the AGM was like a “customer complaints convention”.

At the credit-checking expert Experian, the shareholder revolt centred around the election of the new chairman, Don Robert, who has been elevated from chief executive following a boardroom reshuffle that will see him replaced by Brian Cassin, formerly the company’s chief financial officer.

Overall, it some 30 per cent of investors failed to back Mr Robert’s election.