Shareholders in Royal & SunAlliance that saw the value of their investment plunge 71 per cent in 2002 had the chance to vent their fury at the board yesterday for its terrible performance and high pay awards to directors.
The central focus for their ire, however, was not present at the insurer's annual meeting in London yesterday. Bob Mendelsohn, the chief executive of the company, was ousted last September with a £2.4m pay-off, thanks to his two-year contract. About 28 per cent of shareholders voted against the company's remuneration awards.
One shareholder, Geoffrey Lloyd, said: "What shareholders are increasingly concerned about are the enormous amounts of money which are paid to people who quite manifestly do not deserve it. Remuneration levels today are bordering on the outrageous."
John Napier, the company's new chairman, blamed years of mismanagement at the company, with businesses neglected and allowed to underperform. RSA is now in the midst of a disposal programme to re-capitalise the business after it was left with a £700m shortfall. He promised to return value to shareholders and said he did not want RSA's nickname, the "Rapidly Shrinking Assurance" company, to stick.
He too, though, had to defend his own £250,000 pay packet, double that paid to Sir Patrick Gillam, who retired as chairman this year. "Would you rather have Sir Patrick back at a lower price?" Mr Napier asked as he warned he had no "magic solution" to turn around RSA.
A number of shareholders demanded the group's non-executives be removed, given their part in the fall in value of the company. Bob Ayling was thought unfit for the role after his failures at British Airways and at the Millennium Dome by some shareholders. He fought off an embarrassing revolt over his re-election as a non-executive, when a number of hecklers questioned whether the show of hands in favour of his appointment outweighed those against. Proxy votes, however, were overwhelmingly in his favour.