PIRC, the corporate governance watchdog, said yesterday that it opposed a proposed executive share plan put forward by Quintain, the property company behind plans to redevelop land around the Millennium Dome.
The organisation criticised the new 2004 share plan — which will be put to a vote at Quintain’s annual meeting next month — arguing that it did not consider the performance targets to be “sufficiently challenging”.
The watchdog said: “Pirc is less than positive about the company’s proposed share scheme. We do not believe that the company has made an adequate case for the proposed performance target to be considered challenging.”
Under the terms of the new plan, Quintain directors, including Adrian Wyatt, chief executive, could receive up to a year’s salary in shares if the company outperforms sector indices and delivers a 10 per cent or greater rise in net asset value per share each year over three years.
Under the company’s previous executive share plan the directors were rewarded on the basis of share price growth and the ability to outperform sector performance indices.
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David Somerlinck, corporate governance policy manager at Pirc, said that he did not believe the new target based on growth in net asset value — the benchmark performance indicator for property companies — was sufficiently challenging because over the past five years the company had always delivered Nav growth of 10 per cent or more.
Pirc also recommended that investors should oppose the re-election of KPMG, the accountants as auditors to Quintain. Pirc said that during 2003, KPMG was paid £246,000 in audit fees, but almost three times that — £762,000 — for non-audit related tax work.
Becky Worthington, finance director of Quintain, hit back at Pirc’s concerns, insisting that the new performance targets were more and not less demanding.
She added that Deloitte, the accountant, was now carrying out tax work instead of KPMG to avoid any perceived conflict of interest.