Norris moves to quell revolt over bonuses
Sunday 03 October 2004
Jarvis chairman Steven Norris has persuaded two influential corporate governance advisers to water down their criticisms of the controversial company ahead of the shareholder meeting later this month.
The Association of British Insurers (ABI) and Pensions Investment Research Consultants (Pirc) had voiced serious concerns about performance bonuses paid to former directors of Jarvis covering the year of the Potters Bar rail crash. Jarvis was responsible for maintaining the section of track where the accident happened.
However, after meeting with Mr Norris on Friday, both shareholder groups have vowed to take a softer line on Jarvis because of new measures being put in place to sort out governance of the company.
Pirc will send its voting recommendation to shareholders tomorrow. It is understood that the organisation will urge its members to abstain from voting on important resolutions at Jarvis's shareholder meeting on 14 October. A well-placed source said that Pirc had originally planned to recommend that its members vote against the resolutions.
A spokesman refused to comment on Pirc's recommendations. But, he said: "One of the major complaints we had about Jarvis was a lack of disclosure in the remuneration report. [During the meeting] they did provide us with information on the variables and we will take that into account when we publish our report."
The ABI has been one of Jarvis's fiercest critics. The organisation's head of investment, Peter Montagnon, said last week that "it is a lame excuse to say that they were legally obliged to pay [the bonuses]". And in its report to members, the ABI issued a "red top" warning, which denotes serious concerns over corporate governance.
But after the meeting, the ABI agreed to send an additional report to its members pointing out that the company was taking steps to address concerns over corporate governance. A spokesman for the ABI said: "We are happy to note that the company is taking action to address the failings."
But he added that the "red top" would remain in place. A Jarvis spokesman said: "We had good and open discussions with the ABI and Pirc. We explained fully the situation and we believe they will reflect these matters."
The controversial directors' bonuses, totalling £807,000, were declared in the 2004 annual report even though they were for the previous year. The company delayed the decision on the payment because of the Potters Bar investigation.
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