Nearly half of Pearson shareholders vote against new bumper pay policy
Shareholders almost rejected the company’s remuneration policy.
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Your support makes all the difference.Pearson shareholders came close to rejecting a pay policy on Friday which could make the publisher’s chief executive nearly as well paid as the boss of oil giant BP.
Nearly half (46.37%) of shareholder votes were cast against the new policy, which the board says brings Pearson in line with what US companies pay their top leaders.
Under the new plan Andy Bird, who earned 8.5 million dollars in 2022 (£6.8 million), could earn more than 11 million dollars (£8.8 million) in future years.
Mr Bird’s 2022 remuneration was already worth 181 times more than the average Pearson employee.
The chief executive of BP – worth £94 billion compared with Pearson’s £6 billion – was handed a £10 million pay package after last year’s record results and can earn a maximum of £12 million.
Shareholder advisory groups had advised against Pearson’s new pay deal ahead of the annual meeting on Friday.
ISS called it “excessive” while Glass Lewis said it was concerned by the company’s choice to benchmark against US rivals, which “has resulted in total pay opportunity for the chief executive which significantly exceeds that of UK-listed companies of a similar size,” Bloomberg reported.
In its assessment of Mr Bird’s pay for this year, which only around 13% of shareholders voted against, the board acknowledged the pay “is towards the top end of market practice from a UK perspective” but said it “is still well below that of CEOs at similarly sized US companies”.
Pearson gets much of its revenue from the US, and Mr Bird was previously the chairman of Walt Disney International.
Separately, Pearson said that pushes by workers to learn new skills had helped the company beat its financial expectations in the first months of the financial year.
Mr Bird said that Pearson’s enterprise-facing business, which upskills or reskills workers, had seen double-digit growth in the period.
Overall, the company said that sales had risen by 6% over the period, excluding the impacts of a strategic review and a business unit that Pearson is selling.
Pearson has had a strong start to the year with results ahead of our expectations
Without these items stripped out, sales grew only by 2%, Pearson said.
“Pearson has had a strong start to the year with results ahead of our expectations,” Mr Bird said in a Friday morning update to shareholders.
“We delivered double-digit sales growth in our enterprise-facing businesses, reflecting our strategy to address the upskilling and reskilling opportunity around the world.
“With our new talent investment platform on track to be launched later this year, this progress reinforces our belief that partnerships with enterprises will be a strong driver of future growth.”
Feeling that it had cash to spend, the publisher said that it would buy £300 million of its own shares back from investors in the second half of the year.
Sales of the company’s English Language Learning services rose by two-thirds during the quarter, when compared with the same period a year ago, Pearson said.
It was unsurprising, as the business depends on people wanting and being able to travel to attract customers. A year ago the pandemic was still weighing on global mobility, while most of those restrictions have now been lifted.
The unit also gained market share in India and catered to a temporary increase in Australian skilled visas.
Mr Bird said: “With our new talent investment platform on track to be launched later this year, this progress reinforces our belief that partnerships with enterprises will be a strong driver of future growth.
“Our continuing outperformance and the proven resilience of our business underpins our confidence of delivering on our financial expectations for the full year and over the medium term.”