UK - Corporate governance experts have warned retail giant WHSmith to expect a clash with shareholders over executive rewards for failure at its annual general meeting.
The firm – which has issued a severe profits warning – has come under fire for remuneration arrangements ahead of its January 29 AGM.
Despite poor sales, chairman Richard Handover could receive £233,000 if he leaves before the end of his one-year fixed contract and former head of retail Beverley Hodson is in line for a £437,000 payoff. She left the firm by “mutual agreement” after receiving a £112,000 bonus less than two months ago to retain her services in the run up to Christmas.
Pensions Investment Research Consultants managing director Alan MacDougall said WHSmith’s corporate governance record had been a “cause for concern” for some time and warned that Handover could face a backlash at the AGM.
He said: “There will no doubt be a close examination of remuneration agreements by shareholders in light of the recent problems.”
The Association of British Insurers is monitoring the concerns of members and considering issuing its most severe corporate governance alert for a “serious breach” of best practice.
ABI head of investment affairs Peter Montagnon said: “We do not want to start the year with a conspicuous case of payment for failure, especially while the government is still deliberating on results of its recent corporate governance consultation. We would like to know that the company is doing its utmost to keep Hodson’s payment to a minimum.”
Managing director of proxy voting service Manifest, Sarah Wilson, said that this was another example of why institutional investors needed to monitor remuneration agreements closely.
She said: “Once again corporate governance would appear to be akin to herding cats – just when you think you’ve got one thing straight, another goes wrong. We have just seemed to have got rid of two-year rolling contracts and now new ways are found to bring rewards for failure in around the back.”
The secretary of state for work and pensions has told MPs clawback and avoidance measures could be imposed for the people responsible for driving Carillion over the cliff.
Occupational pension provision has continued to grow in value, but there remains large variance in incomes across the pensioner age group, according to latest government data.
Defined benefit (DB) schemes could have an aggregate surplus by 2021 under Pension Protection Fund (PPF) projections, its strategic plan for 2018 to 2021 reveals.
Investment consultants are failing to recommend products that outperform net of fees, the Competition and Markets Authority (CMA) has said as its investigation into the market continues.