Safestore is bracing itself for shareholder backlash over a revised executive pay scheme not four months after being made to scrap a previous set of proposals.
According to Sky News, the FTSE 250 self-storage firm, could become the first big company to deal with a binding vote on its future pay policy effectively being defeated twice by shareholders. Its existing pay policy expires in October, so it needs to secure approval for a new arrangement before then.
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Safestore will hold a special meeting next week to secure support for a new remuneration policy and long-term incentive plan. The proposed new scheme could hand executive directors, including boss Frederic Vecchioli, millions of pounds in bonuses and share awards.
In March, the firm said it had decided to withdraw its proposals then after an "extensive consultation process" for the changes. At the time, Safestore chairman Alan Lewis, said: "While we have received considerable support from shareholders on the proposed structure it is clear that for others concerns remain."
But sources told Sky News the fresh plans had not been tweaked enough from the set of proposals withdrawn just hours before they were due to be voted on at Safestore's annual general meeting in March.
It's understood that at least two of the voting advisory services which guide institutional investors on resolutions proposed at company meetings are withholding their support from the proposals.
ISS said that votes against Safestore's pay policy and the long-term reward scheme were justified.
Its report to clients said: "Despite a reduction in quantum as compared to the original proposals, the new framework will nonetheless provide a significant (up to c.1.6 per cent of the issued share capital) reward opportunity to the executive directors, for which the underlying rational remains not particularly compelling.
"In parallel, there is an increase in annual bonus award opportunity. Altogether, the new remuneration policy will significantly enhance the total potential remuneration package."
In a statement today, a spokesman for Safestore said:
We have engaged extensively with shareholders, listened to their concerns and revised our proposed remuneration policy accordingly.
The new proposed five-year LTIP (long-term incentive plan) is structured to reward success, extending beyond the board to the wider management team.
The board believes that the policy is right for the company and for all shareholders to continue the success of the last three years.