Legal & General turns up heat on boards over COVID pay packages


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One of the most influential investors in corporate Britain is turning up the heat on boards over coronavirus pay deals with plans to target remuneration committee members at two more of the UK’s biggest companies.

Sky News can reveal that Legal & General Investment Management (LGIM) will lodge its opposition at the annual meetings next week of Arrow Global Group, the debt collector, and Informa, the exhibitions organiser which was forced into one of the pandemic’s biggest public equity-raises.

It follows a number of protest votes by LGIM in recent weeks at companies including Pendragon, the car dealer, and Cineworld – reflecting the fund manager’s vow to punish companies which have rewarded executives after laying off staff or taking government funding.

At Arrow, LGIM said it was unhappy at windfall gains for bosses after the company’s pay committee failed to adjust long-term incentive share awards to take account of the pandemic’s impact on its stock price.

“While this award is clearly not in line with evolving market expectations in this area, additional concern is warranted as the company – following approval at its shareholder meeting in May – will be taken over via a cash offer, thus likely resulting in an early crystallisation of the windfall gain upon the scheme becoming effective,” LGIM said.

Arrow has agreed to be acquired by the private equity group TDR Capital, with the debt collector’s chief executive, Lee Rochford, in line for a £3m payout from his 2020 LTIP award.

A spokesman for Arrow said: “The remuneration committee has always been focused on ensuring management remuneration is closely aligned to the creation of long-term shareholder value, as evidenced by the decision to award no executive bonuses in 2020 based off Arrow’s financial performance.”

LGIM, which intends to vote against the chair of Arrow’s pay committee next week, is going further at Informa by opposing the re-election of all three of the directors who determine boardoom compensation.

The fund manager accused the exhibitions group of failing to pay heed to shareholders’ concerns about its pay policy, and said it had “adjusted the performance conditions for the FY2018 long-term incentive plan (LTIP) awards while the plan is running, resulting in awards vesting where they would otherwise have lapsed.

Informa has been contacted for comment.


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