15th Apr 2016 10:25
LONDON (Alliance News) - A majority of shareholders revolted against Smith & Nephew's pay deals for its top executives at the company's annual general meeting Thursday, as holders with 53% of the company's issued share capital voted against its remuneration report for 2015.
Smith & Nephew late Thursday noted that the resolution to approve the remuneration report received significant opposition, with holders of 307 million shares or a 53% stake voting against it, along with holders of 52 million shares opting to withhold their votes.
The crux of the opposition from shareholders surrounded bonus payments totalling GBP2.1 million to 60 senior executives that was awarded at the discretion of Smith & Nephew's remuneration committee, even though under the company's existing policy these executives would not have received the bonuses otherwise.
The company said that it had made this decision in order to address a "particular anomaly" that had arisen due to losing three companies from the peer group on which its total shareholder return measure is based as a result of market consolidation during the year. This was not intended to "create precedent for future years", Smith & Nephew said.
The company said that Chairman of its Remuneration Committee Joseph Papa had met with a number of major shareholders at the end of 2015 to discuss how this matter should be addressed, and that the feedback from "some of these shareholders" was that it would be better for the remuneration committee to exercise their discretion.
Smith & Nephew said that the remuneration committee is undertaking a thorough review of remuneration arrangements during 2016 ahead of putting a revised shareholder vote in 2017. "Over the summer, they will consult with a broad range of shareholders to solicit their views on how best to align executive reward with shareholder interests," the company said.
Smith & Nephew were not the only company handling a shareholder revolt over remuneration Thursday, as oil giant BP PLC shareholders voted against the remuneration policy for its Chief Executive Bob Dudley and Chief Financial Officer Brian Gilvary, over concerns about their pay packets for 2015 following one of the company's worst financial performances.
Shares in Smith & Nephew were up 0.3% at 1,200.00 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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