16th Jan 2015 11:31
LONDON (Alliance News) - Jim Sutcliffe, recently appointed as the deputy chairman of insurance claims processor Quindell PLC, has stepped down from his position as the chairman of the Codes and Standard Committee for the Financial Reporting Council, the UK's accounting and corporate governance watchdog, the FRC said Friday.
Sutcliffe was appointed to the board of Quindell on Monday along with Richard Rose, who joined as non-executive chairman. The appointments were seen as a bid by the company to try to restore its reputation following a year which saw its share price plunge following a report which questioned its legitimacy as a company and after its founder stepped down in the wake of controversial share dealings.
The appointments of Rose and Sutcliffe, however, were met with further criticism after the pair were handed share options as part of their remuneration and incentive packages.
The UK Corporate Governance Code, issued by the Financial Reporting Council, advises that non-executive directors should not be granted share options or "other performance-related elements" within their remuneration. The code says that if options are granted, shareholder approval for the pay packages should be sought.
Pensions and Investment Research Consultants, the shareholder advisory group, was critical of the decision to award Rose and Sutcliffe the share options. Speaking to the Financial Times, Tim Bush, PIRC's head of governance and financial analysis, had said it is "impossible to overstate how unacceptable this is".
PIRC also raised a further corporate governance issue with the appointments with regards to the appointment of consultancy firm Baxter Bruce, where Sutcliffe is non-executive chairman. PIRC said that while there may be no issue with this, "investors should expect to hear from the company that safeguards are put in place to negate any potential conflicts of interest".
Quindell shares were down 0.6% to 90.90 pence late Friday morning.
By Sam Unsted; [email protected]; @SamUAtAlliance
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