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| BG Group's £25m deal for new chief attacked by directors' group | BG Group's £25m deal for new chief attacked by directors' group |
| (about 4 hours later) | |
| A pay deal proposed for the new head of gas explorer BG Group has been branded "excessive and inflammatory" by one of the UK's leading business lobby groups. | A pay deal proposed for the new head of gas explorer BG Group has been branded "excessive and inflammatory" by one of the UK's leading business lobby groups. |
| The Institute of Directors said a £25m deal for Helge Lund would damage the reputation of UK business if approved at a shareholders' meeting next month. | The Institute of Directors said a £25m deal for Helge Lund would damage the reputation of UK business if approved at a shareholders' meeting next month. |
| The IoD acknowledged its criticism was strong, coming from a body whose job is to promote the interests of UK firms. | The IoD acknowledged its criticism was strong, coming from a body whose job is to promote the interests of UK firms. |
| BG said Mr Lund was being paid a "competitive market package". | BG said Mr Lund was being paid a "competitive market package". |
| Mr Lund joins BG as its new chief executive in March, having been recruited from Statoil with the award of shares worth £12m and the chance of up to another £13.5m in pay, pension and other benefits if performance targets are hit. | Mr Lund joins BG as its new chief executive in March, having been recruited from Statoil with the award of shares worth £12m and the chance of up to another £13.5m in pay, pension and other benefits if performance targets are hit. |
| He established his reputation after transforming Norway's Statoil from a national operator into a global company. | He established his reputation after transforming Norway's Statoil from a national operator into a global company. |
| But some BG shareholders have voiced concern about the size of the annual pay package being offered by the FTSE 100 company. | But some BG shareholders have voiced concern about the size of the annual pay package being offered by the FTSE 100 company. |
| The Investment Management Association, a body representing shareholders, issued a "red top" alert - a warning about potential corporate governance breaches. | The Investment Management Association, a body representing shareholders, issued a "red top" alert - a warning about potential corporate governance breaches. |
| Now the IoD has weighed in with criticism that the pay package "is a red rag to the enemies of the free market". | Now the IoD has weighed in with criticism that the pay package "is a red rag to the enemies of the free market". |
| Simon Walker, the IoD's director general, said: "The Institute of Directors is always reluctant to criticise an individual company. However, we do have a responsibility to criticise an action that brings the whole of British business into disrepute and threatens already fragile attitudes to corporate Britain. | Simon Walker, the IoD's director general, said: "The Institute of Directors is always reluctant to criticise an individual company. However, we do have a responsibility to criticise an action that brings the whole of British business into disrepute and threatens already fragile attitudes to corporate Britain. |
| "For that reason we state explicitly our strong opposition to BG Group's recommended £25m pay deal for its incoming chief executive. It is excessive, inflammatory and contrary to the principles of good corporate governance." | "For that reason we state explicitly our strong opposition to BG Group's recommended £25m pay deal for its incoming chief executive. It is excessive, inflammatory and contrary to the principles of good corporate governance." |
| 'Serious damage' | 'Serious damage' |
| He said it was especially excessive given BG's size. Chief executives at the much-larger Royal Dutch Shell and BP have smaller pay packages. | He said it was especially excessive given BG's size. Chief executives at the much-larger Royal Dutch Shell and BP have smaller pay packages. |
| Mr Walker added: "This pay deal would do serious damage to the reputation of British business six months ahead of a general election and at a time when the reputation of UK plc is still suffering." | Mr Walker added: "This pay deal would do serious damage to the reputation of British business six months ahead of a general election and at a time when the reputation of UK plc is still suffering." |
| The IoD has raised eyebrows before with criticism of pay and bonus issues at Barclays and Sports Direct. But a spokesman accepted that this BG criticism was its strongest yet of a major company. | The IoD has raised eyebrows before with criticism of pay and bonus issues at Barclays and Sports Direct. But a spokesman accepted that this BG criticism was its strongest yet of a major company. |
| BG declined to comment specifically on the IoD's comments. But a spokesman said: "We believe Helge Lund is the right person to lead BG Group. His proposed remuneration is competitive in the international oil and gas industry. | |
| "The shareholder vote on Helge Lund's pay is in line with the letter and spirit of corporate governance legislation." |