Premier Oil, vilified for its past investments in the troubled state of Burma, is facing new wrath from shareholders over a pay package that could give its chief executive a golden parachute of more than £1m.
The National Association of Pension Funds, whose members' assets are worth more than £600m, has advised shareholders to withhold support on the remuneration packages of Premier Oil's directors. It has also recommended they abstain in the vote on the re-election of chief executive Charles Jamieson and finance director John van der Welle at the company's annual general meeting on 15 July.
The NAPF's concern is due to the long notice periods given to its executive directors, who have two-year contracts. If the company underperforms and a director has to go, he will be rewarded with a large payout. Based on last year's salaries, Mr Jamieson would receive £948,000 plus pension benefits and Mr van der Welle £640,000 plus pension benefits if they left.
The NAPF criticised Premier Oil's decision to maintain the contracts without explanation. However, Premier will be introducing one-year service contracts for new executive directors. A spokesperson said: "The company notes the position taken by NAPF."
Premier Oil came under intense pressure to pull out of its gas interests in Burma, which has one of the worst records of human rights abuses in Asia. A military dictatorship has ruled since 1962, and when the opposition leader Aung San Suu Kyi won an election in 1990, she was immediately arrested. Premier has now agreed to sell its Burmese business and is concentrating on oil exploration.