March 23 (Reuters) - Shareholders in British housebuilder Crest Nicholson voted down the directors’ pay report at the company’s annual general meeting on Thursday, another sign of growing discontent about executive pay levels in Britain.
The vote, however, was only advisory and will not change the remuneration.
Investors’ concerns about executive pay at UK companies are growing, but have had little public success so far in forcing company boards to change pay arrangements by accepting their guidance. Often their complaints about excessive handouts have fallen on deaf ears.
Crest Nicholson, which operates in London, southern and eastern England and south Wales, said in a statement that it was “disappointed” by the results of Thursday’s vote. Around 58 percent of votes cast opposed the pay report for the year ended October 2016, its statement showed.
British Prime Minister Theresa May, on taking office last June, vowed to bridge the gap between those at the top of society and those at the bottom by forcing companies to disclose pay ratios and put workers on boards to curb excessive behaviour. But she has been forced to tone down her initial plans as she works to keep big business on side during Brexit.
A report this week showed that the heads of Britain’s top 100 listed companies earn on average almost 400 times more than a worker on the minimum wage.
Institutional Shareholder Services, the world’s largest proxy voting adviser, had recommended that investors vote down Crest Nicholson’s remuneration plans over concerns that its profit targets increasingly were becoming too easy to meet.
The builder, a mid-cap company, defended its pretax profit per share targets for achieving its long-term share incentive plan (LTIP) for 2017-2019, which it said had been investors’ main concern in talks ahead of the AGM.
“The committee believes that this combination of measures presents a sufficiently stretching LTIP,” the company said. It cited an uncertain economic backdrop and competitive environment against which to deliver its target of pretax profit per share growth of 5 percent to 8 percent by 2019.
Shareholders in other housebuilders have raised concerns over LTIP pay for senior executives in the past. Rival Persimmon Plc was called on to scale back an executive pay plan last year by fund manager Royal London Asset Management. ($1 = 0.7992 pounds) (Reporting by Esha Vaish in Bengaluru; Editing by Susan Fenton)