Hedge fund Man Group and RSA Insurance both suffered substantial shareholder rebellions over their bosses’ pay deals on Friday – the latest rows over executive remuneration at stock market-listed companies.
The biggest revolt was at Man Group, the world’s largest listed hedge fund firm at its annual meeting in London. Around 42% of investors rejected the company’s remuneration policy, while 34% voted against its remuneration report and a further 2% abstained. Last year, only 3.5% of votes were cast against.
Man Group noted the “significant” number of votes cast against its pay policies, but insisted it had consulted investors ahead of the meeting and that the majority were supportive..
At insurer RSA, which trades under the More Than brand in the UK, around 16% of investors protested over its chief executive Stephen Hester’s £5m pay package at its annual meeting. Some institutional shareholders are known to be unhappy with the insurer’s decision to grant Hester a long-term share award worth three times his £950,000 basic salary.
At RSA’s meeting near St Paul’s cathedral, several small investors criticised the company’s financial performance and Hester’s bonus. Shareholder Ralph Eschwege described RSA’s financial performance as “very patchy” and said Hester’s annual bonus of £939,000 was “totally unacceptable”. He added: “If he was an honest man he would decline that offer.”
RSA’s chairman Martin Scicluna admitted that the group’s financial performance could be better, but said Hester had “done the best you could in year one and we are all delighted with the progress he’s making … Stephen actually is a very honourable guy.”
There was also a 17% vote against Hugh Mitchell, who chairs RSA’s remuneration committee,
while 13% objected to McKinsey veteran Johanna Waterous, who also sits on the pay committee.
Hester was recruited from Royal Bank of Scotland last year – where he was also the subject of controversial pay awards – to turn around the troubled insurer after several profit warnings and an accounting scandal.
City revolts have been gathering pace in recent days. Bookmaker Ladbrokes, British Gas owner Centrica, satellite operator Inmarsat and broker Tullet Prebon have also witnessed shareholder rebellions over executive pay.
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