News Column

Chime suffers shareholder revolt led by WPP over executive pay

May 16, 2014

Mark Sweney, theguardian.com



Chime has suffered a shareholder revolt fuelled by its largest investor, Sir Martin Sorrell'sWPP, with a quarter of them refusing to support the pay policies that reward its top executives.

Chime, which owns businesses including Lord Coe's management consultancy and Comparethemarket.com ad agency VCCP, counts WPP as its largest shareholder with a 17.66% stake holding 17.33m shares.

Almost 22% of shareholders chose to withhold voting to approve the company's remuneration policy for directors often seen as a protest vote while just over 3% actively voted against it.

Three-quarters of shareholders approved the resolution.

Similarly investors representing just over 21% of the vote failed to endorse the remuneration report, the level of pay awarded to Chime's top executives last year, with just under 80% approving the resolution.

It is understood that Sorrell's WPP was responsible for the large "witheld" vote, however one source says it is not because of any issue with director pay or remuneration policies.

The source said WPP chooses to refrain to cast a vote to give smaller independent shareholders more of a say, a practice WPP is understood to exercise with some of its other investments.

Nevertheless investor advisory firm Pirc put out a note telling shareholders to oppose Chime's remuneration policy.

"The principle concerns relate to potential for excessive variable pay, the lack of explicit performance target disclsoure for the performance share plan, a relatively weak clawback policy and potentially generous severance terms," it said.

Chris Satterthwaite, the chief executive of Chime, received total remuneration of 1.14m last year up from the 1m he received in 2012.

This includes a bonus of 174,825, awarded in shares deferred for three years, and 308,247 from long term incentive plans 34% of the maximum that could have vested.

This is well down on the 393,570 bonus paid out in 2012, and the 737,363 he received that year from long-term incentives vesting.

At last year's annual meeting Chime pushed through bonuses and a controversial performance share scheme, despite more than 50% of shareholders failing to vote them through.

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Source: Guardian Web