Pirc attacks Menzies payout

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The Independent Online

John Menzies, the newspaper distributor to business support services group, has been criticised by one of the major corporate governance activists after it emerged that its board decided to give its outgoing chief executive a golden goodbye worth £339,000.

John Menzies, the newspaper distributor to business support services group, has been criticised by one of the major corporate governance activists after it emerged that its board decided to give its outgoing chief executive a golden goodbye worth £339,000.

David Mackay, who stepped down in May last year, was given £312,500 in shares, plus his company car, a Mercedes, as an ex-gratia award. The move was criticised by Pirc, the pension fund consultants. A Pirc spokesperson said: "Companies are always saying they cannot change directors' contracts. But then when someone leaves and they receive an ex-gratia payment, this is effectively changing the contract."

John Menzies saw its profits collapse in 2003, after the company was forced to take a series of restructuring charges.

John Menzies was yesterday unrepentant about the award for Mr Mackay, saying: "David was with the company for 40 years, it was not like he had just been chief executive for two years. The board thought it was appropriate."

Separately, Royal Bank of Scotland also clashed with the shareholder group, Manifest.

Manifest issued a report saying Fred Goodwin, the chief executive of the bank, could be entitled to up to £8m, or nine times his bonus, over three years. RBS, which has already come under fire for its bumper profits, maintained Mr Goodwin would only be in line for three times his salary under a new medium-term incentive plan.

Another showdown is looming between WPP, the advertising giant, and its shareholders at a meeting on Friday. A number of powerful City institutions have criticised WPP's proposed new incentive scheme, which could see 19 directors and managers receive £112.5m over five years. The controversial plan could award Sir Martin Sorrell, the chief executive of the group, £44m.

A number of major investors yesterday indicated that while they had made some progress in discussions with the company in the past few days, they were still unhappy with aspects of the scheme, and might abstain in Friday's vote.

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