Unilever was dealt a stinging rebuke over its decision to award its former chairman Niall FitzGerald a €1.8m (£1.2m) pay-off, after more than one in three shareholders refused to back its remuneration report yesterday.
Patrick Cescau, the new chief executive, was forced to defend the Anglo-Dutch group's decision to compensate Mr FitzGerald for leaving earlier than he had planned.
A total of 37 per cent of votes were cast in protest at the company's remuneration report, by shareholders either voting against the report or abstaining from voting on that resolution.
One shareholder contrasted the decision to award Mr FitzGerald €1.8m with the total amount of cash that Unilever pledged to the tsunami relief fund - €1.5m. John Farmer, another private investor, asked on what basis Mr FitzGerald deserved a pay-off, given that at the time the company had spun his decision as a resignation.
M. Cescau said: "It was a negotiated departure". And the Frenchman quipped: "That's the beauty of the English language. Negotiated because it was the right moment for this organisation to hand over to a new team."
Shareholders were angry because Mr FitzGerald's departure came during a poor year for Unilever that included a profits warning and missed sales targets.
M. Cescau admitted the strategy started by Mr FitzGerald - dubbed "Path to Growth" - had failed. "There's no question that we have failed. We didn't deliver the growth," he said.
Fred Jackson, a private shareholder, said: "Path to Growth was not a total failure. We have seen substantial growth in directors' remuneration. Mediocre results deserve mediocre payment."
Excluding abstentions, 1 billion votes were cast in support of the remuneration report, or 88 per cent, Unilever said. RREV, the voting recommendation service controlled by the National Association of Pension Funds and the US corporate governance organisation ISS, had advised shareholders to abstain from voting on the resolution.Reuse content