Nearly one in five PageGroup shareholders votes against executive pay
10 June 2013
Despite nearly one in five shareholders voting against the company’s remuneration report for the second consecutive year, the board of PageGroup is “firm in its belief” that its remuneration policy and structure for its executive directors “operates in the best interests of shareholders”, according to a company spokesperson.
Mon, 10 Jun 2013Despite nearly one in five shareholders voting against the company’s remuneration report for the second consecutive year, the board of PageGroup is “firm in its belief” that its remuneration policy and structure for its executive directors “operates in the best interests of shareholders”, according to a company spokesperson.
The 17.8% vote against the remuneration report was by far the highest vote against any of the 19 motions at PageGroup’s annual general meeting last week. None of the others received more than 4.8% against.
However, the PageGroup spokesperson says that the 17.8% vote against the proposals on remuneration of the company’s executive directors meant the report had been “overwhelmingly endorsed”.
Last week’s vote was almost identical to that at last year’s AGM, when just over 17% also voted against the company’s remuneration report. Following that vote, Steve Ingham (left), chief executive officer of what was then Michael Page International, told Recruiter that characterising it as “a pay revolt” was “a little bit over the top”.
In 2012, the four executive board members of PageGroup received total remuneration of £5.98m compared to £3.15m in 2011 when there were three executive board members. Ingham was the highest paid director in both years, receiving £1.89m in 2012 and £1.48m in 2011.
The AGM also voted through new remuneration arrangements for executive directors, effective from 1 January 2013. The main features are:
In its annual report, PageGroup explains that while the intention had been to introduce changes from January 2012, this had been delayed by significant changes among its senior executives.
Seamus Gillen, director of policy at the Institute of Chartered Secretaries and Administrators, tells Recruiter that “shareholder votes on the remuneration report at AGMs are advisory at present and companies can ignore them, though at their peril – any level of dissent on a remuneration vote over 5% is an alarm bell, and over 10% a strong warning to a company”.
However, Kean Marden, head of business services equity research at Jefferies International, plays down the significance of the 17.8% vote against. “It’s pretty normal these days, you need a number significantly north of 20% for it to be seen as a protest these days,” says Marden.
Gillen adds: “A new binding vote regime is about to be introduced in the next few months, which will make it even more important for a company to be able to devise a remuneration package which enjoys shareholder support.”
The 17.8% vote against the remuneration report was by far the highest vote against any of the 19 motions at PageGroup’s annual general meeting last week. None of the others received more than 4.8% against.
However, the PageGroup spokesperson says that the 17.8% vote against the proposals on remuneration of the company’s executive directors meant the report had been “overwhelmingly endorsed”.
Last week’s vote was almost identical to that at last year’s AGM, when just over 17% also voted against the company’s remuneration report. Following that vote, Steve Ingham (left), chief executive officer of what was then Michael Page International, told Recruiter that characterising it as “a pay revolt” was “a little bit over the top”.
In 2012, the four executive board members of PageGroup received total remuneration of £5.98m compared to £3.15m in 2011 when there were three executive board members. Ingham was the highest paid director in both years, receiving £1.89m in 2012 and £1.48m in 2011.
The AGM also voted through new remuneration arrangements for executive directors, effective from 1 January 2013. The main features are:
- rebalancing the fixed vs variable weighting of remuneration components towards lower volatility
- capping the previously uncapped maximum bonus and reducing the cash bonus available
- introducing an element of the bonus focused on key strategic objectives
- capping the previously uncapped maximum long-term incentive and making the entire award subject to EPS (earnings per share) targets, as well as the achievement of specific strategic objectives.
In its annual report, PageGroup explains that while the intention had been to introduce changes from January 2012, this had been delayed by significant changes among its senior executives.
Seamus Gillen, director of policy at the Institute of Chartered Secretaries and Administrators, tells Recruiter that “shareholder votes on the remuneration report at AGMs are advisory at present and companies can ignore them, though at their peril – any level of dissent on a remuneration vote over 5% is an alarm bell, and over 10% a strong warning to a company”.
However, Kean Marden, head of business services equity research at Jefferies International, plays down the significance of the 17.8% vote against. “It’s pretty normal these days, you need a number significantly north of 20% for it to be seen as a protest these days,” says Marden.
Gillen adds: “A new binding vote regime is about to be introduced in the next few months, which will make it even more important for a company to be able to devise a remuneration package which enjoys shareholder support.”
- Click for more from Marden and other City commentators.
