UBM admits defeat over Hollick fee

United Business Media has conceded that shareholders have defeated the company over a vote on a "succession fee" for its former chief executive Lord Hollick, but it will pay the money anyway.

United Business Media has conceded that shareholders have defeated the company over a vote on a "succession fee" for its former chief executive Lord Hollick, but it will pay the money anyway.

Before the annual meeting tomorrow, UBM admitted it lost the resolution to pass its remuneration report - on the basis of the proxy votes received, though investors can change their votes at the meeting.

Shareholder organisations, including the Association of British Insurers (ABI) and the National Association of Pension Funds, are concerned about a £250,000 payment promised to Lord Hollick "based on achievement of a successful handover to the new group chief executive David Levin".

Shareholders have argued that the process of passing over responsibilities to a successor ought to be part of the normal duties of a chief executive.

A spokesman for the company - which has written to shareholders to say it will not make such a payment again - said it had consulted its lawyers who have advised that the payment must be made. This is because it is part of a contract drawn up in November with Lord Hollick, when the company started to look for his successor.

Peter Montagnon, at the ABI, said: "We will have to wait for the final result but it is clear that there is significant opposition to the principle of this payment.... Given that payments of this kind are known to be outside best practice, the company would be helping itself by explaining carefully how it got itself in the position of being contractually bound to make the payment."

Lord Hollick has not yet received the £250,000 special payment, but he is expected to take the money shortly after the meeting, at which he will step down from the UBM board.