Meggitt chair faces shareholder unrest for “overboarding”
The chair of FTSE 250 engineering company Sir Nigel Rudd faces a potential shareholder backlash over his re-election at its Thursday annual general meeting (AGM).
The shareholder unrest has been stimulated by concerns of so-called “overboarding”, that is having too many board positions at other public companies to properly carry out the role.
Proxy adviser firm institutional shareholder services (ISS) recommended in its report that shareholders vote against Rudds re-appointment.
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Rudd is also the chair of three other public companies: FTSE 250-listed aviation services company BBA Aviation, South African-listed paper company Sappi and Aim-listed pharmaceutical business Destiny Pharma.
In its report ISS said: “Overall, these positions carry significant time requirements and are likely to undermine Sir Nigel Rudd's ability to adequately fulfil his role as chairman of Meggitt.”
Sky News, which first reported the potential shareholder unrest, said that as many as one third of Meggitt shareholders could vote against Rudds re-appointment to the role.
The ISS report noted that Rudd had recently overseen the succession process of a new chief executive, run an appointment process for a new non-executive director and overseen an audit tender, but nevertheless felt that he had too many responsibilities to fully commit to the role.
Read more: Meggitt's shares rocket as profit beats expectations
“A director is typically considered over committed if they have an aggregate of three chair positions,” it said.
“Sir Nigel Rudd has a total of four chair positions. Further, all but one of the companies have a significant market capitalisation and operate in complex and very competitive markets, such as aviation,” it added.
“His external time commitments are very significant and raise serious concerns as to how he can adequately perform his duties as chair at Meggitt, which itself is a very large (and growing) global business within a complex sector,” it said.
Rudd, who is paid £350,000 a year in his role as Meggitt chair, is a former chair of car retailer Pendragon, a former deputy chair of Barclays and a former non-executive director of BAE Systems.
Meggitt declined to comment.
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