Weinstock departs with an attack on Greenbury reforms

Lord Weinstock yesterday delivered a typically single-minded attack on the latest trends in corporate governance as he handed over the reins of GEC, the defence and electronics giant, to former Lucas chief executive George Simpson after 33 years at the helm.

In his farewell speech to shareholders at the company's annual meeting, Lord Weinstock rounded on aspects of the Greenbury and Cadbury committees set up to curb excesses in company boardrooms. "[They] are not engraved in stone and brought down from Mount Sinai," he said.

"I don't like non-executives being set against executives as Cadbury seems to imply. It destroys the cohesion of the board. They should be supported by non-executives, not held in suspicion by them.

"One or two of the Greenbury provisions are a bit peculiar," he continued. "They are used as an excuse to virtually persecute directors.

"Trust must exist in a democratic capitalist society between shareholders and the people who run their company. The last few years have seen examples of greed and exploitation of privileges ... but we have been more frugal than any company."

Lord Weinstock was speaking after shareholders heard Lord Prior apologise to Mr Simpson for causing him "acute embarrassment" over the way GEC dealt with his controversial pay and options package potentially worth up to pounds 1.5m a year.

"I don't think we have handled this matter very well and I regret it very much," Lord Prior said.

Mr Simpson's appointment to the board was overwhelmingly approved by shareholders. Details of his original remuneration threatened to spark a revolt among institutional investors who claimed the performance threshold needed to trigger share option and incentive awards were too low.

But earlier this week, GEC amended the terms and conditions, which are now based on top quartile share performance as measured against the FT- SE 100 index.

Mr Simpson will receive an annual salary of pounds 600,000 plus annual pension contributions of pounds 300,000 and a one-off pounds 500,000 payment in compensation for what he would have received at Lucas had he stayed with the company.

His initial three-year contract is allowed under the Greenbury code, but this will revert to a one-year contract to comply with current codes of best practice.

Lord Prior paid tribute to Lord Weinstock, saying that he had become a "legendary figure" in British industry during his time at GEC.

"No other industrialist in the whole of the post-war period has made a comparable contribution to the survival and success of British industry," Lord Prior said.

Clearly moved, Lord Weinstock sat with his head in his hands as Lord Prior also paid tribute to Lord Weinstock's son, Simon, who died of cancer earlier this year.

Lord Weinstock received a standing ovation after his speech in which he made clear that he saw Mr Simpson as a force for continuity and not change.

Leadership of GEC, he said, took "teams of people who trust each other and can work together - putting ego behind them".