Glass Lewis tells Melrose investors to vote down £42m-plus executive pay

Just as turnaround firm Melrose Industries thought it had manoeuvred out of the public eye, it now faces a potential shareholder revolt on its executives' pay.

Shareholder proxy firm Glass Lewis has advised investors to vote down "excessive compensation" at the company, which made headlines earlier this year as it battled against customers, politicians and shareholders to acquire engineering giant GKN.

Glass Lewis condemned Melrose for awarding each of its four top executives more than £42m last year, most of which stemmed from a long-term incentive plan (LTIP) which was granted in 2012 and crystallised in 2017.

Read more: Melrose has won the battle for engineering giant GKN as shareholders vote in favour of takeover

"Given the substantial payouts resulting from awards vesting under the company's 2012 LTIP, we are unable to recommend shareholders support this proposal at this time," Glass Lewis said in a note regarding the pay.

Melrose's executive chair Christopher Miller, executive vice-chair David Roper and chief executive Simon Peckham all received a base salary of £475,000, a three per cent increase on the previous year.

The "benefits" awarded to them ranged from £18,000 to £20,000, while Peckham was awarded an added bonus of £428,000. Meanwhile each grabbed £41.77m from the LTIP.

Geoffrey Martin, the finance director, received a slightly lower £380,000 salary with £27,000 of benefits, a £342,000 bonus and £41.77m from the LTIP.

Read more: Melrose says £8bn GKN offer is "unconditional in all respects" as the engineering giant's board resigns

Glass Lewis said the remuneration "far outpaced" that in other European companies of a similar size.

Melrose, meanwhile, has reasoned that it has created £3.6bn of shareholder value since the LTIP was initiated in 2012.

Shareholders are due to vote on the pay report at Melrose's annual general meeting (AGM) on 10 May.

Read more: Persimmon in close shave as almost half of shareholders refuse to permit pay report which awarded boss £110m

Leave a Reply