UK - Pension schemes played a key role in the shareholder revolt which rocked GlaxoSmithKline by rejecting its remuneration report.
Only 49.28% of investors backed the board at the annual general meeting making it the biggest shareholder revolt of its kind in UK corporate history.
Latest data shows that many of the UK’s largest pension funds have investments in GSK, including the £20bn Unilever Superannuation Fund, the £7bn ICI Pensions Fund and the £2.5bn Marconi Pension Scheme.
GSK chairman Sir Christopher Hogg has suggested that the controversial directors’ pay contract, which provoked the shareholder revolt, could be rewritten.
He said a full independent review of the pay contract would be carried out by Deloitte & Touche, and further discussions with investors would be held.
Sir Christopher said: “The major reason for this negative vote has been the fact that there are elements of our senior level remuneration package which do not accord with what is regarded as best practice by some shareholders.”
The remuneration package included a “golden parachute” pay package for chief executive Jean Pierre Garnier, estimated by corporate governance activists PIRC to be worth around £22m.
Local Authority Pension Fund Forum deputy chairman John Saunders – who attended the meeting – challenged the board to justify the performance targets.
He said: “What we find totally unacceptable are the remuneration structures that almost guarantee payments for mediocrity or even failure.”
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
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