SHAREHOLDER groups yesterday criticised Gartmore’s decision to pay its departing chief executive over £5m despite the firm’s share price more than halving during his tenure.
Jeffery Meyer will receive a £3.75m payoff as well as a £2.033m salary package including a £1.2m bonus.
Gartmore’s shareholder value has dropped dramatically under his leadership, from a 220p-per-share flotation price in January 2009 to 92p per share when sold to rival Henderson in January.
Investor groups criticised the package as a “payment for failure” but said such contractual clauses could not be changed. “There will be some unhappy shareholders, but the horse has effectively bolted,” one investor representative told City A.M.
“It is not right by any natural justice but it is what the courts uphold,” people close to another group told City A.M. “People will ask why have the non-executive directors allowed this to go ahead?”
Gartmore’s value has slumped since two star fund managers, Guillaume Rambourg and Roger Guy, resigned last year. The firm has haemorrhaged funds since, with investors withdrawing £7.2bn in 2010.