LONDON British travel firm Thomas Cook (TCG.L) said investors holding almost 30 percent of its stock voted against its remuneration report on Thursday, in a sign that shareholder anger over soaring executive earnings has not died down.
A large number of investors in British companies registered their disapproval of executive pay during the 2012 annual meetings season, an episode known as the 'shareholder spring'.
The significant vote against the salaries of executives at Thomas Cook, one of the first big British companies to hold its annual general meeting in 2013, suggests the investor backlash against pay has not gone away.
Last year, it cost Aviva (AV.L) boss Andrew Moss, and Sly Bailey, then head of newspaper group Trinity Mirror (TNI.L) their jobs, and there were also significant votes against management pay packages at companies such as advertising agency WPP (WPP.L) and insurer Prudential (PRU.L).
Thomas Cook, the world's oldest travel group, said its remuneration report was approved by 70.3 percent of votes cast, while 29.7 percent voted against the resolution.
The company has issued a string of profit warnings and has been forced to renegotiate bank loans but has also seen a steady improvement in its finances since travel industry outsider Harriet Green took over as chief executive last May.
"The board believes that the progress made by the company under the new leadership team and the very substantial shareholder value generated over the past six months fully justifies the remuneration decisions," Thomas Cook said in a statement.
The remuneration report, as detailed in the company's 2012 annual report, stated that Green received an annual salary rate of 680,000 pounds ($1.1 million) in 2012 with a maximum annual bonus equal to 225 percent of her base salary for July 2012 to September 2013. It said the bonus payable will be decided at the end of the period.
From the end of September onwards, her maximum bonus will shrink to 150 percent of base salary.
Thomas Cook said the higher initial bonus was designed to incentivize her to carry out the company's transformation plan.
Details of pay for Michael Healy, the new chief financial officer who was also appointed in May, were also published in the remuneration report.
He was paid an annual salary rate of 480,000 pounds in 2012 with the possibility of earning a maximum bonus of 150 percent of his pay. The company said it paid him a bonus equivalent to 6.25 percent of his 2012 pay.
Investors warned last year that the days of company resolutions being rubber-stamped were over, and Britain's business secretary said last year the government planned to legislate to give shareholders the power to reject company director pay deals.
(Reporting by Sarah Young; Editing by Sophie Walker and Jane Baird)
Trending On Reuters
Greece's combative finance minister resigned on Monday, removing one major obstacle to any deal to keep Athens in the euro zone after Greeks voted resoundingly to back the government in rejecting the austerity terms of a bailout. Full Article | Greece a flashpoint for Europe?