Scottish oil firm Cairn Energy is facing a potential shareholder rebellion over a bumper pay award to its chairman, Sir Bill Gammell.
The Association of British Insurers, which represents about 20% of UK shareholders, has issued a “red-top” – the most serious warning of a breach of governance norm – for the company.
Some shareholders believe Cairn has insufficient performance criteria for its top bosses, while around £2.5million share options awarded to Sir Bill will vest in three years regardless of where he is.
Investors are due to vote on his share payment later this month.
Meanwhile, Cairn today announced the start of production from the Bhagyam field in Rajasthan.
Bhagyam is the second largest of 25 discoveries made so far by Edinburgh-based Cairn in the Barmer basin.