Nurofen and Cillit Bang maker Reckitt Benckiser is braced for a backlash from investors against chief executive Rakesh Kapoor’s £23m salary and bonus package.
The expected rebellion at this week’s annual meeting is set to be much larger than last year’s protest, when 17.2% of investors voted against Kapoor’s £13m package for 2014. The Reckitt uprising is the latest skirmish in the battle between investors and the boards of some of Britain’s biggest companies over excessive executive pay.
Last week, just under half of the shareholders at drugs giant Shire voted against a 25% pay hike for chief executive Flemming Ornskov.
Weir suffered even greater ignominy when more than 72% of investors in the engineer rejected a lavish new bonus scheme for its top brass. The vote was binding, so Weir will have to draw up a new scheme by next year’s meeting.
Bumper pay has long been a bone of contention for shareholders in Reckitt, whose market value has more than doubled over the past five years. In 2009, Kapoor’s predecessor, Bart Becht, received more than £90m in stock and cash. Adrian Bellamy, the Reckitt chairman, has presided over more than £250m in total remuneration to chief executives since taking on the role in 2003. He has been on the board since 1999, significantly longer than the normal tenure for a director.
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“The mood has changed. Reckitt and Shire are strongly performing companies, yet investors are still voting against pay deals,” said one institutional shareholder.
Hedge fund giant Man Group is expected to come under fire this week over its pay scheme for top executives. Last year 43% of investors failed to support a plan to increase short-term bonuses substantially. A 10% pay rise for chief executive Manny Roman — taking his base salary to $1.1m (£750,000) — has compounded their simmering anger.
Online grocer Ocado could also suffer a pay revolt this week. Chief executive Tim Steiner took home £5.9m last year after hauling in £6.5m in 2014. The company lost a quarter of its value last year.
Emerging markets lender Standard Chartered is braced for a stormy shareholder meeting too. Chairman Sir John Peace had pledged to step down but the bank is yet to name his replacement. “A lot of people are frustrated,” said a source. “The longer he stays, the harder it gets to support him. He needs some encouragement to step aside.”
