Another powerful investor group has hit out over BG Group’s plan to reward its next chief executive with a pay deal worth £25million.
BG’s shareholders should “put their foot down” and vote against the package for incoming CEO Helge Lund, ShareSoc said yesterday.
It added: “Mr Lund was previously CEO of Statoil, a company which turned over £57billion in 2013, compared with £12billion for BG Group.
“At Statoil, Mr Lund’s total taxable remuneration in 2013 was £1.3million. BG Group are now proposing a package with a base salary of £1.5million and annual and long-term bonuses that can amount to up to eight times that base salary – and an expected on target (performance-related) annual payout of £5.5million in addition to base salary, pension and other benefits.
“As if this were not already generous enough, shareholders are now being asked to approve an extra conditional award of shares, with a face value of £12million, as a golden hello on top.
“That is in addition to a relocation allowance of £480,000 and a further payment of up to £3million to compensate for the loss of Statoil variable pay that Mr Lund will forfeit on his departure from his former employer.”
ShareSoc said there was no evidence that “outsize” pay and bonus awards lead to improved performance.
It added: “Surely the banking crisis has taught us the danger of a high bonus and target-driven culture leading to poor corporate governance and poor long-term performance?
“ShareSoc urges all BG Group shareholders to put their foot down and vote against this proposed resolution.”
The Investment Management Association, Legal and General and the Institute of Directors have also highlighted concerns about the pay deal for Mr Lund, who joins BG in March.
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