Co-op in AGM protest over Corus boss's 130% pay rise

Corus has become the latest company to be censured by the Co-operative Insurance Society, after the Manchester-based institutional shareholder surfaced at the steel giant's annual meeting yesterday to attack the 130 per cent pay rise awarded to its chairman last year.

Unions were enraged earlier this month when Corus disclosed that Sir Brian Moffat received £558,846 in basic salary and fees last year, against £302,818 in the previous 15 months. The company, which is shedding 11,000 British jobs, said the award reflected Sir Brian's enlarged duties as chairman and chief executive.

CIS yesterday voted against the reappointment of Eric van Amerongen, the head of Corus's remuneration committee. Blocking the reappointment of non-executives is a common device for showing disapproval with executive remuneration, which is usually not put to a shareholder vote.

Mr van Amerongen was reappointed by 1.72 billion proxy votes, with 23 million proxy votes against.

Ian Jones, CIS's head of corporate governance, said Sir Brian's pay rise was "highly inappropriate" given the large job losses and general pay freeze at Corus.

"To have such a significant difference between the treatment of the head of the company and employees, particularly at this difficult time, poses significant risk to Corus, particularly in terms of staff morale – a risk that is ultimately passed on to shareholders," he said.

Mr Jones said CIS would be protesting at other company meetings. While CIS is best known for its "ethical" investment funds, most of its investment activity involves well-known blue-chip stocks whose corporate governance and environmental standards often fail to meet those of the Co-op. The society argues that it can only bring about change in the way companies behave if it invests in them.

Last week, it claimed to be one of the principal forces behind Stelios Haji-Ioannou's decision to step down as chairman of easyJet.

"Our relationship with companies is an ongoing process and our experience shows that corporate change can and does occur even after [annual meeting] resolutions have been defeated," said Mr Jones.