By Jessica Hodgson
LONDON--Shareholder proxy voting agency Manifest Sunday issued a
strongly worded warning to Imperial Tobacco Group PLC (IMT.LN) that
it could face a shareholder revolt if it doesn't consult
shareholders more broadly on a planned change to its compensation
policies.
Manifest's Chief Executive Sarah Wilson said in an emailed
statement to Dow Jones Newswires that Manifest was "extremely
disappointed" with the failure of Imperial Tobacco, which makes
Lambert & Butler cigarettes, to adequately consult.
The opposition sets the stage for a possible showdown between
Imperial and its largest investors ahead of its Jan. 30 annual
shareholder meeting; less than a year after some of the U.K.'s
largest companies faced investor rebellions that claimed some top
jobs.
Manifest is concerned with the failure of Imperial Tobacco to
consult on a proposed change to the way directors are incentivized,
according to the email.
"After the tumultuous proxy season last year we had hoped that
more remuneration committees would have taken on board the point
that early and complete communication with shareholders is
crucial," Ms. Wilson said.
"Simply leaving matters to the last minute of the run-up to the
[shareholder meeting] does not create the right environment for
dialogue and getting to agreement. The way that some of the key
facts were hidden in obscure documents will not encourage
shareholders to think well on IT's governance arrangements," she
said, adding that Manifest believed 20% or more votes could be
with-held when the company's compensation arrangements are put to
shareholders at the meeting.
The Sunday Telegraph newspaper reported that two other U.K.
shareholder bodies, the Association of British Insurers and
Pensions and Investment Research Consultants, have also raised
objections to the planned changes. According to the newspaper the
proposed changes relate to the way share options and awards are
given, as opposed to with actual payments. The ABI declined to
comment Sunday, while PIRC couldn't be reached for comment.
Imperial Tobacco didn't return a call seeking comment.
The newspaper said all three bodies were in discussion with
Imperial Tobacco ahead of the meeting and hoping to reach a
resolution.
Manifest's objections come at a sensitive time for U.K.
companies in their relations with shareholders over pay. A broad
wave of investor anger claimed the jobs of three executives of
companies listed on London's blue-chip FTSE index last summer.
Andrew Moss, the CEO of insurer Aviva PLC (AV.LN); David Brennan,
CEO of AstraZeneca PLC (AZN.LN); and Sly Bailey, the CEO of Trinity
Mirror PLC (TNI.LN), all quit amid investor disquiet over their
remuneration or company performance. Advertising giant WPP Group
PLC also faced a rebellion over the pay of its Chief Executive,
Martin Sorrell, although investors stopped short of voting against
his re-election to the board.
-Write to Jessica Hodgson at jessica.hodgson@dowjones.com
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