Latest news with #shareholderrebellion
The Independent
15-05-2025
- Business
- The Independent
Next suffers shareholder rebellion over pay transparency
Next has been dealt a bloody nose by shareholders after more than a fifth backed proposals to provide more transparency over pay at the firm's annual general meeting (AGM). The retail giant saw 26.9% of shareholder votes supporting a resolution that called for more information about how many of its staff are being paid below the 'real living wage'. This is a voluntary benchmark that is independently calculated by the Living Wage Foundation based on the cost of living and exceeds the legal minimum wage. The proposal was put forward by ShareAction, which campaigns for responsible investment, and was backed by institutional investors such as Axa Investment Managers, Greater Manchester Pension Fund, Scottish Widows and Trust for London. While not legally binding, support for shareholder resolutions can put pressure on business leaders to respond to the matters raised and more than 20% of dissent can be considered a shareholder rebellion. It comes as part of ShareAction's wider campaign to put pressure on retailers over low pay at this year's AGMs as the impact of the cost-of-living crisis continues. The group has put forward proposals to the boards of Next, M&S and JD Sports as part of efforts to see workers paid a real living wage. The Living Wage Foundation's wage is currently set at £12.60 per hour nationally and £13.85 per hour in London for those aged 21 and over. This compares to the legal minimum wage, which is currently £12.21 for the whole country including London. Reacting to the vote at Next, Catherine Howarth, ShareAction's chief executive, said: 'Today's vote sends a tough message to the board of Next and the entire retail sector – clearly, investor concern is rising around the problem of retailers underpaying staff and the effects this is having on their business and workers. 'This is a serious level of support for resolutions of this kind and Next is now legally obliged to respond to this resolution and clarify how it will act on investors' concerns. 'We look forward to engaging the company based on a new level of transparency around low pay, a key step to better protecting all its staff with a real Living Wage. 'Major national and international pension funds and other responsible investors have demonstrated they want to see action to drive up standards around pay across the retail sector. 'We urge shareholders to continue to support the resolutions co-filed at JD Sports and M&S which will go to a vote later this summer.' Charlie Crossley, investment engagement manager at Friends Provident Foundation, said: 'Today's vote signals investors want retailers to address the transparency gap around wage practices. 'It is now clear Next should provide more meaningful disclosure on their policies for low paid workers, a crucial step toward ensuring workers can meet the cost of living. 'Sector-wide progress is required, which is why investors are also pursuing similar resolutions this year at other major retailers.' In response to the result, Next said the resolution was not supported by the board and defeated by a 'very significant margin'. However, the firm said it would expand what it publicly shares about its wage-setting principles and practices in its next annual report. 'Although the board does not agree with the form of the resolution, it recognises the value of providing more clarity on how wages are determined and managed at Next,' it said. 'The company has a long-standing commitment to transparency and aims to offer shareholders meaningful insight into its decision making. 'Accordingly, we welcome the suggestion and will expand our disclosure on wage-setting principles and practices in our next annual report.'
The Guardian
08-05-2025
- Business
- The Guardian
British Gas owner suffers shareholder rebellion over CEO pay packet
The owner of British Gas has suffered a shareholder rebellion after handing its chief executive a multi-million pound pay packet while energy bill payers struggle with record levels of debt. Nearly 40% of Centrica's shareholders voted against the board's pay plans at the energy company's annual investor meeting in Manchester on Thursday, after rising criticism of boss Chris O'Shea's pay during the energy crisis. O'Shea's basic salary rose 29% last year to £1.1m to take his total pay packet, including bonuses and share-related pay, to £4.3m for the year. The pay day was about half what he was paid the year before when his pay packet ballooned to around £8m, largely thanks to a £5.9m bonus scheme. The pay rises have angered consumer groups, fuel poverty campaigners and climate activists who have accused the company of profiting from higher energy prices after Russia's invasion of Ukraine while millions of households have struggled to pay their heating bills because of soaring energy costs. In total household energy debt and arrears have climbed to around £3.8bn, an increase of around £2bn since the start of 2022. Centrica's market value has grown by over 250% in the last five years due to climbing energy market prices after the Covid-19 pandemic and Russia's invasion of Ukraine. However, shares in the FTSE 100 company fell by 7.5% on Thursday after it warned that the mild start to spring would dent its profits for the first quarter. Ahead of the shareholder vote leading proxy adviser, Institutional Shareholder Services (ISS), recommended against supporting O'Shea's pay packet at the annual meeting. ISS told its clients the pay rise was 'materially above those given to the wider workforce' and 'not considered to be supported by cogent rationale'. Mel Evans, Greenpeace UK's head of climate, called on the government to cap pay rises and bonuses for energy companies so they are not 'rewarded for deepening the cost of living crisis'. 'You know the profiteering has gone too far when even the shareholders start rejecting the bumper pay rises put forward by greedy bosses,' Evans said. 'We're all sick to death of being unfairly ripped off by the gas industry, who have made eye-watering profits at the expense of ordinary billpayers in recent years.' O'Shea said last year that it was 'impossible to justify' his pay when British Gas customers were struggling. 'You can't justify a salary of that size,' he told the BBC. 'It's a huge amount of money; I am incredibly fortunate. I don't set my own pay; that's set by our remuneration committee.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion A spokesperson for Centrica said: 'While we welcome the backing of the majority of our shareholders for that resolution following extensive engagement on remuneration, we will continue to engage with shareholders in constructive and open dialogue. 'The company will provide an update to shareholders within six months of today's meeting.' Separately, Tesco's annual report revealed that the pay of its chief executive Ken Murphy fell by about £1m to £9.23m – still 373 times that of the average employee at the supermarket group – after he missed targets on his bonus-related sales and profits as well as food waste. The retailer was forced to revise down its success in tackling food waste after a problem with a partner – which it emerged was turning the waste into energy rather than feeding it to animals as agreed. This year Murphy could earn more than £10m if he hits all his targets as his basic salary has been increased by 2% to almost £1.5m.
