Plans to raise CEO bonus to 150% of basic salary go through, despite investor opposition
Nearly a quarter of Balfour Beatty’s shareholders voted against the group’s plan to amend its remuneration policy that will see bonuses for top directors rise from 120% to 150% of basic salary.
At the contractor’s AGM, held yesterday (18 May), 23% of those voting on the proposals rejected them, although the proposal was carried.
Balfour’s chief executive Leo Quinn and finance boss Philip Harrison stand to benefit from the changes, subject to certain targets being met. Quinn is currently paid a basic salary of £800,000, while Harrison is on £400,000. These basic salaries remain unchanged from 2016.
In 2016 Quinn received a total pay package of £1.45m, including benefits and bonuses, while Harrison was paid a total of £720,433.
Last year Balfour reported a total pre-tax profit of £8m on total revenues of £8.7bn, compared with a loss in 2015 of £199m on total revenue of £8.4bn.
The company undertook a review of its executive pay structure last year. Outlining the changes to its pay policy in the group’s 2016 report and accounts, the remuneration committee’s chairman Iain Ferguson wrote: “I am pleased to report that our discussions with major investors in relation to the revised policy have been positive and we hope that we can count on the support of shareholders for these important changes.”
Noting the vote at yesterday’s AGM, Balfour said that much needed to be done to achieve the group’s full potential value, “and the new policy aligns with that goal”.
It went on: “The [remuneration] committee will ensure that implementation of the policy, from target-setting to incentive awards, focuses on that objective and will continue to listen carefully to shareholders’ views and consult on any material changes.”