Pendragon has vowed to formulate new remuneration policy after its shareholders voted 65.5% against its plan to hand over multi-million bonuses to its leadership team.
Shareholders took decisive action against the AM100 car retail PLC’s pay policies at its AGM today (June 21), while 35.1% voted against the re-election of chief executive Bill Berman as a director and 39.8% voted against the re-election of Dietmar Exler as a director.
The action comes weeks after influential shareholder advisory group Glass Lewis branded the group’s decision to issue sizable bonuses in a year in which the business claimed almost £65m in COVID-19 support from the UK Government as “inappropriate”.
In a letter it called on shareholders to vote against the re-election of remuneration committee chair, non-executive director Mike Wright and to reject the dealer group’s pay report in what would be a third shareholder revolt against executive pay in three years.
Following this morning’s AGM, a statement issued by Pendragon confirmed that 16 of 17 motions had been passed, with the exception of resolution 2 – it’s remuneration report.
It said: “The Company will continue to consult with shareholders to fully understand their concerns in relation to the number of votes recorded not in favour of resolutions 2, 3 and 5. An update will be provided within six months as required by the UK Corporate Governance Code.”
It added: “The board recognises the significant vote against the report on directors' remuneration. The remuneration committee sought to ensure the rewards for the executive team were commensurate with the group's financial performance, in line with market benchmarking and in keeping with the remuneration policy's aim to support the longer-term success of the business for all stakeholders.
“Although the remuneration committee is satisfied its decisions were made in the best interests of all stakeholders, it respects the views expressed by shareholders regarding the resolution.”
In May last year major Pendragon shareholder, Hedin Group, joined other key stakeholders in stating it would vote against “out of tune” bonus payments.
That move came after Berman received payment of a deferred bonus worth £413,000 which looked set to take his annual rewards to £3.2m.
That payment was proposed despite the business’s axing of 1,800 jobs and utilisation of millions of pounds of taxpayers' money to furlough staff through the Coronavirus Job Retention Scheme (CJRS).
At the time, Hedin Group boss Anders Hedin said: “This needs to stop as it is totally out of tune with what all other stakeholders in the company are experiencing and the amount of taxpayer support received.”
Last month Hedin increased his stake in Pendragon to just over 27% of voting rights.