DS Smith faces a shareholder revolt over pay

RECYCLED packaging company DS Smith yesterday faced a shareholder revolt over its pay policies.

At its annual meeting 40 per cent of investors, including abstentions, failed to back three votes on pay, including the remuneration report covering last year’s pay, the remuneration policy covering pay for the next three years and a separate long-term plan, the performance share plan (PSP).

Of those that voted, 18 per cent were against the remuneration report, 23 per cent against the remuneration policy, and 23 per cent against the PSP.

The pay scheme will see chief executive Miles Roberts earn a maximum of £3.3m while finance director Adrian Marsh could earn £1.7m. Both packages are dependent on performance.

The backlash follows recent criticism of Roberts’ £200,000 relocation allowance after the firm moved its head office from Maidenhead, Berkshire, to Euston Road in London.

Roberts was living in a village near Bishop’s Stortford, Hertfordshire – closer to London than Maidenhead – but the company said he should live in London to give him time to spend with “important stakeholders”.

It is not the first time that DS Smith shareholders have objected to executive rewards. In 2012, a third of investors voted against the group’s remuneration policy, objecting to a special bonus awarded to top executives for executing a €1.6bn takeover of a European rival SCA Packaging.

Last night a spokesman for DS Smith said: “We understand remuneration is an important issue both for companies and shareholders. That is why we have conducted an extensive consultation exercise and we are pleased with the passing of all our resolutions, including on remuneration, by a significant majority, of at least 75 per cent in all cases.

“The figures may look stark but Miles himself is judged to be a very successful CEO. At the AGM there was not a single question about the pay issue and he got a round of applause after speaking.”

Shares in the company lifted five per cent yesterday after it announced improving volumes and returns.