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Investor activism was evident again in the UK this week, with shareholders threatening to vote down pay packages at WPP and Xstrata and voicing concern over the chairman’s role at FirstGroup.
Approval of Sir Martin Sorrell’s £6.8m pay package at WPP is looking uncertain after the influential shareholder adviser ISS recommended that investors vote against it. One top-10 shareholder predicted a “bloody nose” for Sir Martin.
FirstGroup’s chairman has longer to persuade shareholders that he has the time to devote to a turnround of the transport company. Investor displeasure with Martin Gilbert, who has led the board for 17 years, broke to the surface this week and could come to a head at FirstGroup’s general meeting in July.
Xstrata has come under fire for the £30m “golden handcuff” it has promised to pay chief executive Mick Davis to keep him from walking away within the first three years of the miner’s proposed merger with commodity trader Glencore. Investors holding more than a 10th of Xstrata’s shares have said they are unhappy with the retainer fee and will have a chance to vent their anger at a vote on July 12.
The showdowns follow a series of investor rebellions between late March and early May, when companies including Barclays, AstraZeneca and Trinity Mirror, came under fire – with the executives of the latter two groups forced to step down.
Xstrata, for one, should realise these things do not just blow over: last month, Mr Davis’s 2011 pay package passed with the support of only 63 per cent of votes cast.