Anglo American was one of last year’s high-profile targets for shareholders who’d had enough of inappropriately generous remuneration being handed out to executives.
At the 2016 AGM, 41.6% of shareholders voted against the group’s remuneration report, which provided for a £3.4m pay package to CEO Mark Cutifani, after a year of dismal profit performance.
At the AGM chairman John Parker blamed the large “no” vote, which did not affect Cutifani’s pay, on the “very frenzied” wage debate going on in society — but he added that the group was listening to shareholders.
Oil giant BP also recorded a hefty “no” vote.
CEO Bob Dudley was awarded £14m for a year in which there had been thousands of job cuts and record losses.
Consumer goods company Reckitt Benckiser irritated its shareholders when it paid CEO Rakesh Kapoor £23m, a sum that was quickly dwarfed by the £63m awarded to advertising company WPP’s CEO, Martin Sorrell.
In SA the R50m one-off discretionary cash bonus that was paid out to Shoprite’s Whitey Basson seemed modest compared with the almost R1bn windfall enjoyed by SABMiller’s last CEO, Alan Clark.
After years of painstaking challenges, shareholder activist Theo Botha has only been able to create a small crack in the
wall that Coronation Fund Managers has erected around
its remuneration policy.
Botha argues that Coronation’s refusal to disclose what are believed to be packages that run to tens of millions of rand is a key part of the remuneration problem.
“These are the people who should be playing a restraining role on behalf of millions of ordinary savers, but they can’t because they’re conflicted,” says Botha.
Despite the occasional noisy outbursts from individual shareholders, there has been little consistent progress on the pay front anywhere in the world; led by US and UK example, executive remuneration only ever goes upwards, and at a substantially steeper rate than that of workers.
The latest initiative from key UK stakeholders might be just what’s needed to move things forward.
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