UK - Vodafone's corporate governance record has come under a fresh attack by the NAPF, despite a considerable improvement in shareholders' fortunes.
The mobile phone network provider has seen a 41% increase in half-year profits, only five months after it hit the headlines with record losses of £13.5bn.
But the NAPF has urged pension funds not to relax their disapproval of firms that award large bonuses for over seeing transactions.
At the time of the group’s losses, investors expressed fury at the decision to award the firm’s chief executive Chris Gent a £1.7m bonus for having over seen the purchase of German industrial group Mannesmann in 2000.
An NAPF spokesman said: “We stand by our conviction that we don’t approve of bonuses for overseeing transactions. It is better to wait until the impact of these transactions becomes transparent.
“It seems shareholders are pleased with Vodafone’s performance, but this positive result won’t happen in every case.”
Proxy voting agency Manifest agreed and stressed that Vodafone is not yet back in the position that it was in three years ago, where shares peaked at £4. It added that it is too short-term to say that the company has recovered and deserves praise.
Axa Investment Managers UK equities manager Jim Stride said Vodafone has done a good job in managing cash and that shareholders were pleased with the dividend growth being increased to 10%.
*The NAPF’s opposition to Gent’s bonus led to it meeting with Vodafone to advise on a remuneration package prior to the mobile phone company’s AGM earlier this year. After thrashing out a deal the NAPF hailed the package as a blueprint for the rest of the industry.
The package – backed by 85% of shareholders – only awards bonuses to senior executives if they meet what it “difficult performance targets”, claims the NAPF.
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