Premier Foods faced a major revolt over executive pay at its AGM yesterday when 26.3% of shareholders voted against its remuneration report.
The report covered pay in lieu of notice for Robert Schofield, Jim Smart and Tim Kelly. Schofield, who was due to retire as chief executive on 28 April this year, stepped down last August following the appointment of Michael Clarke. He was paid £419,205 to cover the remainder of his notice.
Jim Smart, who left his CFO post at the beginning of the year, received £509,350 in lieu of his 12 months’ notice, while COO Tim Kelly, whose role was removed in a management reshuffle, received £492,050.
The remuneration report also included a £1.5m cash bonus for Michael Clarke to compensate him for long-term incentives he would have received had he stayed in his previous position in Kraft Foods.
Clarke immediately invested the money into Premier shares. His fixed pay is £750,000 plus a 20% pension contribution. He is also entitled to a cash bonus worth up to £1,125,000 for meeting various targets on turnover, profits and refinancing.
Clarke may also receive £1,500,000 worth of Premier shares at the end of 2014 if he meets shareholder return targets.
Clive Black, head of research at Shore Capital said 26% opposition was a “substantial record of discontent” and would have resonated around the Premier board.
“The vote is consistent with growing interest and awareness from fund managers about directors’ remuneration,” he said.
“That interest reflects the deep unhappiness by many retail investors and financial commentators in particular about an unacceptable corporate gravy train.”
Black said the dissenting votes were likely to have been levelled at Schofield, who oversaw a string of disappointing results. “Clarke has done a sound job to date,” he noted.