OIL explorer Cairn Energy yesterday shelved a plan to pay founder and chairman Sir Bill Gammell £2.5m in order to quell a shareholder revolt.
The decision was announced amid the wider furore over executive pay, which has led business secretary Vince Cable to draw up plans to tackle perceived boardroom excess.
Gammell’s planned payment was shot down in flames after shareholders of the FTSE 100 company complained that they not been consulted fully over the sum, according to insiders. The move heads off a showdown at next week’s planned shareholders’ meeting.
The £2.5m would have been a share bonus, with a further £1m being paid to a charity of Gammell’s choice out of company coffers. The Association of British Insurers had issued a “Red Top” notices – flagging up its concerns about Gammell’s bonus.
Legal & General, one of Cairn’s biggest shareholders with a 4.87 per cent stake, said after the meeting: “We have been speaking to the company about their proposed share award and we are pleased that they, having reflected on their shareholders concerns, have decided to think again.”
Gammell, the former Scotland rugby international steered through the £3.5bn sale of the group’s Indian business Vedanta last year – a deal which was being used to justify his £2.5m windfall.