British oil explorer Cairn Energy said investors holding two-thirds of its stock voted against executive pay awards in one of the biggest rebellions to take place yet in the “shareholder spring” of salary disapproval.
A growing number of investors in British companies are registering their disapproval at rates of executive pay.
The shareholder revolts follow public anger at big pay rises for executives at a time when many Britons are feeling the pinch as a result of high inflation and weak wage growth.
The 67-per-cent vote against Cairn’s remuneration report at its annual meeting on Thursday is the second time in six months that shareholders have expressed their aversion to the company’s pay plans.
Following pressure from investors, Cairn dropped plans to award chairman and founder Bill Gammell share options worth £2.5-million ($4-million) in January.
Thursday’s “no” vote, however, will have no immediate consequences beyond embarrassing headlines as the votes on remuneration reports are non-binding, something that could change in future.
Business minister Vince Cable has spoken of “ludicrous” levels of executive pay that are “getting way out of line with performance” and is proposing to enhance the voting rights of investors, including introducing an annual binding vote on future remuneration policy.
The vote against Cairn’s executive salaries is one of the biggest to date, topping the nearly 50-per-cent votes against remuneration reports at newspaper group Trinity Mirror and bookmaker William Hill.
On Thursday Prudential, Britain’s No. 1 insurer, said investors holding almost a third of its shares voted against its executive pay plans.
“We have listened to shareholders’ concerns, having had extensive dialogue with investors in recent weeks. Cairn has learned from the recent consultation and is committed to listening closely to shareholders views on governance,” said Jackie Sheppard, Cairn’s new chairman of its remuneration committee, in a statement.
Shareholders owning 27 million shares refused to vote for Cairn’s remuneration report, withholding their votes, while investors owning 11 per cent of shares opposed the re-election of former Scotland rugby international Mr. Gammell as chairman.