This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/2017/feb/01/sports-direct-pressure-board-executive-pay-mike-ashley-standard-life-investments

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Sports Direct investor ramps up pressure over board and executive pay Leading investor signals it may oppose City bosses' pay rises
(about 3 hours later)
Sports Direct has come under renewed investor pressure over its failure to address “major concerns” about executive pay and governance. One of the City’s biggest investors has put top company bosses on notice that excessive pay rises will be not be tolerated.
Standard Life Investments said it would continue to press for change on a number of issues at the retailer, including the excessive influence and dominance of its founder, Mike Ashley. Standard Life Investments – which is also putting Sports Direct under renewed investor pressure over its failure to address executive pay and governance – is signalling that it is prepared to vote against pay rises for chief executives unless there is a convincing reason for them.
“We have been concerned for some time about governance arrangements at Sports Direct,” the investment company said in its annual governance report. “The board lacks independence and the non-executive directors lack the appropriate skills and experience to enable robust challenge of the executive team, particularly the founder and major shareholder Mike Ashley. With Imperial Brands having to abandon a resolution head of its annual general meeting on Wednesday that would have led to a multimillion-pound a pay rise for its chief executive Alison Cooper, major City investors appear ready to block huge pay deals during this year’s AGM season.
Euan Stirling, head of stewardship at the Edinburgh-based fund manager, said: “The remuneration committee will have to be very persuasive, that all other things being equal, the chief executive should be paid more.”
The government is consulting on reforms to executive pay and Theresa May also put boardroom pay on the agenda during her campaign to become prime minister. BlackRock, the world’s biggest fund manager, has also seized the issue and last month wrote to the 350 biggest companies on the stock market to urge them to rein in excessive boardroom pay.
Standard Life Investments published its stewardship update for 2016 in which it said it would continue to press for change on a number of issues at Sports Direct, including the excessive influence and dominance of its founder, Mike Ashley.
“We have been concerned for some time about governance arrangements at Sports Direct,” the annual governance report said. “The board lacks independence and the non-executive directors lack the appropriate skills and experience to enable robust challenge of the executive team, particularly the founder and major shareholder Mike Ashley.
“We also have major concerns regarding its remuneration policy. We have engaged with senior executives and non-executives over many years on these issues, but to little effect. We will monitor future developments and expect to engage further over the coming year.”“We also have major concerns regarding its remuneration policy. We have engaged with senior executives and non-executives over many years on these issues, but to little effect. We will monitor future developments and expect to engage further over the coming year.”
Standard Life Investments welcomed Ashley’s appointment as chief executive September last year. It said it was a role that better reflected his influence as majority shareholder and founder than his former “ill-defined” position of executive deputy chairman.Standard Life Investments welcomed Ashley’s appointment as chief executive September last year. It said it was a role that better reflected his influence as majority shareholder and founder than his former “ill-defined” position of executive deputy chairman.
SLI, which has £269bn of assets under management, also welcomed the company’s decision to allow an independent party to review governance, but said it had concerns “about their ability to deliver”. The fund management arm of insure Standard Life, which looks after £270bn of investments for savers and pensioners, welcomed the company’s decision to allow an independent party to review governance, but said it had concerns “about their ability to deliver”.
The report highlighted Sports Direct’s treatment of its workers, which has been widely criticised following a Guardian investigation.The report highlighted Sports Direct’s treatment of its workers, which has been widely criticised following a Guardian investigation.
Volkswagen was also singled out by the asset manager as an “escalation candidate”, suggesting it will put more pressure on the German car manufacturer to change its ways following the emissions scandal that rocked the group in 2015.Volkswagen was also singled out by the asset manager as an “escalation candidate”, suggesting it will put more pressure on the German car manufacturer to change its ways following the emissions scandal that rocked the group in 2015.
“We continue to believe that increased board independence is crucial to rebuilding trust at Volkswagen and will continue to engage on this basis,” SLI said.“We continue to believe that increased board independence is crucial to rebuilding trust at Volkswagen and will continue to engage on this basis,” SLI said.
Reflecting more broadly on 2016, SLI’s head of stewardship, Euan Stirling, said investors had loudly voiced their anger over excessive boardroom pay deals. Shareholder revolts last year shook some of Britain’s biggest companies, including BP and the medical equipment group Smith & Nephew. Stirling said investors had loudly voiced their anger over excessive boardroom pay deals last year when shareholder revolts shook some of Britain’s biggest companies, including BP and the medical equipment group Smith & Nephew.
Stirling said: “The original shareholder spring of 2012 was replayed in 2016, with widespread dissent in shareholder ranks against excessive pay for management. We place particular emphasis on corporate culture and the impact of excessive remuneration and the responsibility of shareholders to hold boards to account.Stirling said: “The original shareholder spring of 2012 was replayed in 2016, with widespread dissent in shareholder ranks against excessive pay for management. We place particular emphasis on corporate culture and the impact of excessive remuneration and the responsibility of shareholders to hold boards to account.
“The serious implications of failure in these areas suggest that further remedies are likely to be sought.” “The serious implications of failure in these areas suggest that further remedies are likely to be sought”.
Standard Life had voted against the £70m pay deal for Sir Martin Sorrell, chief executive of WPP, and “escalated our action by voting against the members of the compensation committee” the fund manager said in its report. It abstained on pay at BP and against the pay deals at Shire Pharmaceuticals, which also faced a shareholder revolt last year.