Two-thirds of SIG shareholders vote against executive pay rise plans
Friday 14 May 2010
The building supplies group SIG faced a revolt yesterday when two-thirds of shareholders voted against plans to give its chief executive a 15 per cent pay rise.
Investors refused to approve the annual remuneration report which proposed raising Chris Davies's salary to £535,000, after a torrid year that saw SIG tap shareholders with a £340m rights issue.
Although shareholders' votes on the renumeration report are only advisory, SIG's chairman, Les Tench, said he was disappointed at the negative response and would re-open consultation to understand investors' concerns about the salary increase. "I am extremely concerned about this result and take it very seriously," he added.
Mr Davies was appointed in 2007 on a wage of £465,000, which Sheffield-based SIG says is in the lower salary quartile for such a role. He deferred a proposed salary increase last year.
Mr Tench said Mr Davies's performance had been instrumental in SIG's improving outlook and the remuneration committee was unanimous that a pay rise was justified. "Chris has performed extremely strongly in difficult circumstances since his appointment and has provided exemplary leadership and direction to the group as we undertake a significant restructuring and cost-cutting exercise," he said.
"I and the remuneration committee strongly believe the new salary is not excessive. However, I recognise the strength of shareholder opinion."
SIG joins a growing list of companies facing investor unrest about boardroom pay. Last week, nearly a third of shareholders in the mining giant Xstrata voted against a remuneration report that proposed a 41 per cent rise in the package enjoyed by its chief executive Mick Davies, who is not related to Chris Davies at SIG.
Reckitt Benckiser was stung when 16 per cent of investors voted against a £90m payout for its chief executive, Bart Becht. The defence giant Cobham recorded a "no" vote of almost 33 per cent for its pay plans, while Lloyds Banking Group and BP have also faced resistance from investors over wages.
Last month, the Russian aluminium mogul Oleg Deripaska agreed to give to charity two-thirds of a $62m (£42m) bonus he received for the flotation of his company Rusal. The payout caused surprise because Rusal's shares were still trading below the flotation price.
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