Old Mutual shareholders have suggested they may vote against a proposed £9 million remuneration package for group chief executive Bruce Hemphill.
The South African life company put forward the proposed remuneration packages for its senior managers on Tuesday. The proposals will be voted on at the company’s annual general meeting on 28 June.
According to the Financial Times a number of key shareholders have expressed concern about the amounts set to be paid out under the remuneration plan and could vote against it at the meeting. If more than 50% of the votes go against Old Mutual it will have to reconsider its proposal.
The plan would effectively grant Hemphill a possible 1000% bonus on his base salary of £900,000 if he met certain performance targets, such as profit figures and shareholder returns.
Hemphill’s payout would also be dependent on whether he manages to complete a planned break-up of the company by the end of 2018.
Earlier this year Old Mutual revealed plans to split up its four businesses into separate entities. Old Mutual Wealth, the UK-based company which owns network Intrinsic, Old Mutual Global Investors and the Old Mutual Wealth platform, is expected to be sold or floated separately.
One top 20 Old Mutual shareholder told the Financial Times the proposed package is ‘unusual and large’ and described the possible 1000% bonus as ‘very generous, particularly if the company is split up before 2018’.
Another top 20 shareholder said: ‘We need to look closely at the performance target as the maximum payout is a lot. However, breaking up a company is a complicated job and the chief executive is out of a job by the end of it all’.
According to the report both shareholders were considering whether to vote against the plan.
Source: New Model Adviser