Shareholders in pay row with British Gas
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Your support makes all the difference.Two shareholder groups have opened a fresh attack against British Gas for the way the company has opposed demands for reforms of its boardroom pay.
Pension Investment Research Consultants, PIRC, which has lodged a resolution for next month's annual meeting demanding British Gas directors reconsider executive remuneration, is angry at the way the board has declared its opposition in bold type across the bottom of the notice to shareholders.
Anne Simpson, joint managing director of PIRC, said: "I think it is extraordinary they have decided to print their own advice underneath our resolution. The whole purpose of an AGM is to hold directors accountable to shareholders. It is quite wrong for directors to tell shareholders how to vote . . . I hope it backfires and shareholders get angry at being told what to do."
British Gas has already been sharply criticised for the pay awards it has given to its chief executive, Cederic Brown, whose package rose more than 70 per cent last year.
The UK Shareholders Association, which has about 400 private shareholders as members, is also angry at the way it was prevented from circulating its own resolution calling for reforms in the way the company sets directors' pay.
Donald Butcher, chairman of the UKSA, said that at first he was told there were not likely to be extra costs in sending out the UKSA proposal to shareholders. However, at the last moment he was told there could be substantial costs that UKSA would have to bear.
Mr Butcher said: "They had been co-operative until the 11th hour, when they got their lawyers involved. This cost thing came up at the last moment. They had said no cost were likely. I'm an innocent private shareholder who assumes other people play with a straight bat. I was unaware of the guile and subtleties of company directors."
UKSA's resolution was for shareholders to approve a ceiling on the budget for directors' pay.
"This would have allowed the board to legitimise what they spend on themselves. They would be able to tell journalists and others to go away and get rid of the criticism which is going on and on and damaging the company."
A British Gas spokesman said: "There is nothing unusual about voting recommendations. They have been made in the past and are not untoward."
On UKSA's claims, the spokeman said: "The company secretary had been very clear on cost. He never committed one way or the other."
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