More revolts over executive pay are looming

Marion Dakers
SHAREHOLDERS could be waiting until 2013 or 2014 to voice dissent at companies’ executive pay packets, according to research out yesterday.

While a string of high-profile investor rebellions at the likes of WPP and Aviva has caused a stir this year, shareholders have been discerning in their protests.

Just 10 of the FTSE 100 companies attracted a protest vote of 20 per cent or more for their remuneration reports this year, down from 34 in 2011, professional services firm KPMG said.

Among FTSE 250 firms, 29 saw a sizeable number of investors oppose or abstain from votes on top pay, up slightly from 24 the previous year.

“A number of these were not solely pay related, but instead were driven by a combination of dissatisfaction around corporate performance and the leadership of the business,” said David Ellis, head of reward at KPMG.

“In many cases this year, shareholders really were focusing on the link between pay and performance.”

But alterations due within long-term incentive plans at a glut of firms could be a fresh source of investor friction in the coming years.

“It is our view that the flexing of shareholder muscle in 2012 may well be a rehearsal for what is to come,” said Ellis.

“The last few years has seen only a relatively small number of new long-term incentive plans being proposed to shareholders.

“A number of companies have clearly being waiting to understand better the economic and regulatory landscape before formulating new plans and consulting with shareholders,” he added.