PIRC lobby group urges shareholders to vote against directors' pay deal at AGM this week
Shareholder lobby group PIRC has recommended that shareholders vote against the directors' pay deal at housebuilder Bellway at its annual general meeting on Friday.
The move follows the awarding of £240,099 in bonuses in 2009, despite a shareholder revolt over directors' awards last year.
A PIRC statement said that although bonus criteria had been changed since the revolt, the terms were now too tight. It said: “Our view is that all long-term incentive schemes should base rewards on at least two challenging criteria to avoid excessive focus on a particular measure. We recommend shareholders oppose the remuneration report.”
The row last year was sparked when some shareholders became angry that performance targets for 2008 had been changed retrospectively to enable the payment of bonuses.
In this year's annual report, Bellway said: “The committee has been very mindful of these concerns and undertook extensive consultations with institutional shareholders on future bonus arrangements in the spring of this year.”
This year John Watson, the chief executive, received a bonus of £104,391 on top of his salary of £515,000. The total, including pension, of £799,646 was down 3% on last year's figure of £824,917, which included a £275,000 bonus.
As a result of the talks, Bellway reduced the maximum bonus figure from 120% to 100% of salary and based payments on fixed targets for operating profit (excluding writedowns), which accounts for 40% of the bonus. The rest will be based on cash generation targets (40%) and personal performance (20%), which will be evaluated by the remuneration committee.
The payments are in contrast to Persimmon, Barratt and Redrow, none of which paid top bosses performance bonuses last year.