Cigarette giant Imperial lights up new investor pay row
Written by Hit Music Radio News on 28/01/2021
Imperial Brands, Britain’s second-biggest tobacco manufacturer, risks igniting a new row with investors over boardroom pay after handing its new male chief executive a bigger salary than his female predecessor.
Sky News has learnt that a number of institutional investors will vote against Imperial’s remuneration report at its annual meeting next week amid disappointment about what they describe as a “lack of clarity” about boss Stefan Bomhard’s £1.269m annual wage.
Investor anger has been fired by a report from the proxy advisor Institutional Shareholder Services (ISS), which is recommending opposition to the company’s pay report.
Mr Bomhard’s base salary is nearly 13% higher than that of Alison Cooper, his predecessor, according to ISS, and the company had provided “no compelling explanation” for this.
“It is unclear whether this premium was necessary to secure him in the role – the company does not discuss the salary rate in any detail within the remuneration report,” ISS said.
“However, it is highlighted that his last disclosed salary at his previous employer was circa £761,000.”
Imperial is no stranger to shareholder pay rows, having withdrawn a resolution in 2017 that would have seen Ms Cooper land a potential £8.5m annual pay deal from increased bonus arrangements.
While there is no suggestion of direct gender bias in Imperial’s pay arrangements for its former and new CEOs, one shareholder said that the impression created by the divergence in their salaries and the lack of explanation from the company was “unhelpful”.
Imperial has come under increasing pressure from investors to realign its strategy amid poor financial performance in recent years.
This week, Mr Bomhard outlined a strategy to refocus investment on its core tobacco business in five major markets, including the UK.
He said the company would be more selective about backing its vaping business, which includes the Blu brand.
It was unclear on Thursday how large the revolt against Imperial might be at its AGM, which will take place next Wednesday.
ISS has separately recommended that shareholders vote in favour of Imperial’s new three-year remuneration policy, which is binding.
Imperial said: “We have consulted extensively with shareholders about our remuneration policy and we are confident that they will support the resolution.”
The company did not address the prospect of a substantial vote against its remuneration report – which is advisory only – in its response to Sky News.
© Sky News 2020