Shareholder rebellions: which companies have faced revolt?

May 3, 2012

Aviva and UBS investors are the latest to put their foot down over low returns and high executive pay

EXCESSIVE boardroom pay is sparking rebellion amongst shareholders around the world, with Aviva and UBS the latest companies to face investor revolts.

Two in five investors opposed UBS's pay proposals at a meeting of around 3,400 investors today while even more, three out of five, opposed Aviva's. The rebellion reflects a wider anger over multi-billion dollar pay deals in companies where returns to investors have not been so lucrative. CNN has branded the trend 'Occupy Boardroom', as more and more shareholders attempt to push out board members and fight back against executive pay packages.So which companies have faced rebellion and why? 

In one of the largest rebellions in corporate history almost 60 per cent of investors failed to back Aviva's pay report today. At the insurer's annual meeting held in London, shareholders called for chief executive Andrew Moss to stand down and accused board members of being "more concerned about remuneration than growing the business".

UBS also suffered a blow today as 37 per cent of shareholders voted against the Swiss bank's executive pay scheme at a meeting in Zurich. Shareholders claim the bank's payout of €77.1m to its executive board's 12 members poorly reflects last year's performance, citing as proof the loss of €2.25bn in a rogue trading scandal and share prices dropping by 28 per cent.

Despite an investor rebellion last year, advertising giant WPP has increased chief executive Sir Martin Sorrell's remuneration package by 60 per cent. Two in five shareholders voted against the move last year but the company pushed it through anyway. Although WPP has been judged to have hit its performance targets by the company's remuneration committee, the pay leap comes at a time of increasing activism amongst corporate shareholders.

Last month, more than half of US firm Citigroup's investors failed to endorse the remuneration package for the company's CEO and four of its top executives. Citigroup has seen some of the largest losses among American banks since the financial crisis. While the vote is not binding, economists described it as a serious warning to the rest of Wall Street and corporate America.

At the end of April, almost a third of Barclays' shareholders refused to back the bank's annual pay awards. After revealing enormous losses in the year's first quarter, investors felt chief executive Bob Diamond's pay package of £17.7m was unmerited. He himself had described Barclays' 2011 performance as "unacceptable". The vote may alter very little in reality, but observers have noted that it caused the bank major embarrassment.

At hedge fund Man Group, 15 per cent of shareholders failed to approve its pay report yesterday. Chief executive Peter Clarke was offered a $7m pay package, despite the company's sinking share prices and inability to meet six key performance targets. On top of that, almost one in three investors voted against the reappointment of non-executive director and remuneration committee member Alison Carnwath, who is also on the remuneration committee at Barclays.

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