29th Apr 2016 08:18
LONDON (Alliance News) - ShareSoc, the UK individual shareholders society, on Friday said it is advising its members to vote against Reckitt Benckiser Group PLC's remuneration resolutions at its annual general meeting on May 5.
ShareSoc noted that Reckitt has "performed very well" in terms of shareholder returns since 2000, but said it believes the remuneration of Chief Executive Rakesh Kapoor is "indefensibly high". Kapoor received GBP23 million for 2015, making a total of GBP56 million since his appointment in 2011.
According to ShareSoc, both Kapoor and previous CEO Bart Brecht have collectively received GBP120 million over the past seven years.
"A reasonable, fair and adequate CEO remuneration would be less than half this amount," ShareSoc Director Cliff Weight said.
ShareSoc said the level of remuneration looks even worse when viewed against the background of Kapoor's potential future equity incentives. Kapoor's unexercised 1.8 million options have GBP34 million gains to date, while his long-term incentive plans would currently be worth GBP49 million if fully vested.
"With these existing incentives, I question why he needs to be given any more," Weight said.
The earnings per share target when Reckitt is doing share buybacks is also a concern, ShareSoc said.
Finally, ShareSoc added that the constitution of the remuneration committee, the majority of whom are CEOs themselves, is "inappropriate and may favour generous awards".
Shares in Reckitt were trading down 0.7% at 6,705.00 pence on Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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