Imperial Brands is in danger of sparking a shareholder rebellion over plans to award its CEO as much as £8.5m a year.
The Bristol-based tobacco company proposes to bump CEO Alison Cooper’s pay packet by up to £3m more than she received last year, if she meets targets. Shareholders will have the chance to vote on the plan at the annual meeting in February.
Agencies providing advice to shareholders are split over the proposal. While the Institutional Voting Information Service (IVIS) has issued an amber warning, advisory service Glass Lewis will support the plan. Institution Shareholders Inc. (ISS) is expected to release a recommendation early this week.
Yesterday The Sunday Times reported that at least one of Imperial’s top ten investors intends to vote against the pay packet.
If the proposal is met with opposition, it is likely to be the first of many shareholder rebellions this year.
Blackrock, the world’s largest fund manager, renewed is opposition to big bonuses last week by writing to the chairmen of every company in the FTSE 350, urging them to limit remuneration for executives.
The letter says that the firm, which is though to be in the top three investors for every business in the FTSE, will only approve salary rises for directors if the wages of ordinary employees are increased proportionally.
Blackrock provided a set of guidelines to assist companies in reforming pay policies, warning that annual shareholder votes should not be used as “pro-forma justification” for exponential pay increases.
The guidelines also reiterated a policy suggested by Amra Balic, head of BlackRock’s investment stewardship team in Europe, the Middle East and Africa (EMEA) last year. She told a hearing of MPs that the firm would consider voting against electing committee members who were in favour of large bonuses.