UK - A £1.7m bonus package for Vodafone's chief executive Christopher Gent in the wake of its record £13.5bn loss may be blocked by pension schemes.
Corporate governance experts expect Gent’s deal to be the focus of intense shareholder scrutiny at Vodafone’s annual general meeting. And nearly a quarter of the telecoms giant’s stock is held by pension schemes.
Axa Investment Managers UK equities managing director Jim Stride said shareholders were still angry that Vodafone had paid too much for German industrial group Mannesmann – a £133bn deal which Gent oversaw two years ago.
Stride added: “We are seeing dividend growth of 5% per year but this should be higher at around 7% per year.”
And a leading fund manager and corporate governance expert said: “Pension scheme members should put pressure on their pension fund trustees to take a practical line on this issue.
“The trustee can then put pressure on the fund manager to follow up on their views and vote in a practical way.”
The NAPF pointed out that it had opposed Gent’s bonus package for overseeing the acquisition of the German industrial group as far back as 2000.
An NAPF spokesman said: “We don’t approve of bonuses for over seeing transactions. It is better to wait and see what these transactions are worth for shareholders before you start rewarding people.”
A number of pension schemes are hoping that Gent will take a lead from Marks & Spencer chief executive Luc Vandervelde and decline the bonus. Vandervelde last year refused his entitlement to a bonus of £816,000 after the retailer posted disappointing results.
This week's edition of Professional Pensions is out now
Collective defined contribution (CDC) schemes will need clear and transparent governance frameworks, as well as effective communication strategies, to be a success, the Work and Pensions Committee (WPC) has been told.
The aviation sector's constant evaluation of mistakes to improve safety should be applied to defined benefit schemes, as too many are making the same mistakes again and again, latest research shows.
A month of strikes are due to hit 64 universities from tomorrow over major reforms to the Universities Superannuation Scheme (USS).