Shareholders urged to vote against bonus boost at Premier Inn owner
2 December 2019, 17:24
PIRC has echoed a call by advisory group ISS, however Glass Lewis supports the proposals.
Shareholders in Premier Inn owner Whitbread should vote against a new pay package for its top executives, according to an influential advisory group.
Proxy adviser PIRC joined another advisory group, ISS, calling for shareholders to vote against the new proposal, which could hand executives bumper bonuses.
The proposal has been backed by Glass Lewis, another such group.
If shareholders pass the new system at a meeting on Friday they could be handing chief executive Alison Brittain more than four times her annual salary in total pay from the next financial year.
Her remuneration will be based on if she can meet certain targets set out by the board.
“The total potential awards under all incentive schemes are considered excessive at 325% of salary,” PIRC said in a note to shareholders.
“Based on these concerns, an oppose vote is recommended,” it added.
Last year, Ms Brittain pocketed nearly £3.7 million from the sale of Costa, the company’s coffee chain, to Coca-Cola for £3.9 billion. This brought her total pay to nearly £5.6 million. Ms Brittain will not be able to get this much under the new proposal.
Whitbread said: “Following extensive consultation with shareholders over the last few months, the Board believes that the proposed remuneration plan is the best structure to create long-term alignment with the interests of shareholders and incentivises management to make decisions for the long-term benefit of Whitbread.”
In a letter to shareholders, Whitbread earlier this year said that it needed to change Ms Brittain’s pay because she is a woman.
“The [remuneration] committee is also mindful of the need to ensure that Whitbread does not contribute to the clear gender imbalance in relation to female CEO remuneration across comparable FTSE 100 companies,” the company said.
Meanwhile, the company said despite the sale of Costa, which leaves Premier Inn as Whitbread’s main arm, the business is more complicated.
“Given the importance of international expansion, as well as the challenging market conditions Whitbread faces domestically, the level of complexity in the business is increasing.”