Diageo hit by investor critic on pay

DIAGEO, the owner of drinks brands such as Smirnoff, was hit by a protest against “unacceptable” changes to its rewards for veteran chief executive Paul Walsh yesterday.

Cooperative Asset Management, which owns £83m of Diageo shares, told the annual meeting it was “alarmed” to see the board loosen restrictions on Walsh’s bumper share awards without asking shareholders.

Diageo will let Walsh walk away with all shares awarded for Diageo’s performance whenever he resigns, even if that is before the end of the three-year review period. In normal practice, he would be given only some.

“We were alarmed to find that a significant change to the leaving provisions for the CEO only…was omitted from the shareholder consultation process during the year,” the investor said. “We find this unacceptable.”

The attack echoes growing disquiet among investor groups at the rewards at Diageo. The firm did not release the results of yesterday’s votes but last year more than 13 per cent refused to back its remuneration report.

The Coop also slammed Diageo’s refusal to engage with it on pay for eight years. Diageo had “never deigned to provide us with a response”, while “long-standing concerns remained in abundance” over performance, it said.