WH Smith faces backlash over new chief executive’s pension | Business News

0
68

WH Smith risks becoming the first major company to face a pay backlash this year after an influential adviser warned investors over the pension award to its new chief executive.

Sky News has learnt that the voting advisory service run by the Investment Association (IA) has issued a red-top notice – its strongest-possible objection – over the high street retailer’s remuneration report ahead of this month’s annual general meeting.

The IA’s alert relates to the fact that Carl Cowling, who recently took over as WH Smith’s chief executive, is being paid a pension contribution worth 12.5% of his salary – a proportion higher than the average paid to the company’s workforce.


The investor body has run a prominent campaign over the last year aimed at forcing blue-chip to curtail pension perks for their bosses.

It has pledged to recommend voting against pay reports where new executive directors receive higher awards than their employees

Last year, companies including Barclays, De La Rue and Standard Chartered ran into protests over executive pension allowances before – in the banks’ cases – backing down.

WH Smith is understood to feel aggrieved at the stance of the IA’s Institutional Voting Information Service (IVIS) because it had already halved Mr Cowling’s pension payment from 25% of his salary when he became a director in February last year.

In its annual report, the company said it had made that decision when investor groups’ guidance on pension awards “was still evolving”.

It added that any new executive director appointments to the board “will be aligned with the then average rate available to UK employees more generally”.

The campaign over executive pensions has caused consternation in many boardrooms, with a number of chairmen arguing privately that they should not be asked to break contractual agreements with their executives.

WH Smith declined to disclose what the current average pension contribution is to its UK-based workforce.

The company also refused to comment on the IA’s red-top alert.

Other proxy advisers, including Institutional Shareholder Services, have recommended voting in favour of WH Smith’s report in just under a fortnight.

The IA confirmed its red-top on WH Smith’s pay report but declined to comment further.


By

Source link


LEAVE A REPLY

Please enter your comment!
Please enter your name here