Fat cats on the run: Ralph Topping, Paul Polman, Sir Martin Sorrell, Sly Bailey and Andrew Moss
Last year it was the Arab Spring. Now the “Shareholder Spring” is hogging the headlines. During one of the worst downturns in memory, in which millions of workers have endured a pay freeze, some fat cats have continued to rake in massive salary rises, while some of the companies they manage have failed to perform. But that’s about to change. The Sunday Times states: “William Hill, Unilever and WPP are braced for rebellions over lavish boardroom rewards at the annual general meetings over the coming weeks.” The report, by Oliver Shah, Simon Duke and Karl West, continues: “Investors are this week set to protest against William Hill’s pay plan for a third year, this time because of a £1.2 million retention bonus and 8.3% rise for Ralph Topping, chief executive. “At Unilever, concern centres on a possible 6% rise for Paul Polman, the chief executive, which would take him to £975,000.” Those sums pale in to insignificance when compared to the salary of Sir Martin Sorrell, the chief executive of WPP, the firm behind the disgraceful Argentine Olympics advert. Last year, he enjoyed a 30% pay rise which took his basic salary to £1.3 million, although with bonuses and incentives he actually pocketed nearly £13 million. His employers also increased the maximum he can earn from bonuses to 500% of his basic. So in theory his bonus this year could be £6.5 million. While these three are potential victims Sly Bailey is already a confirmed casualty. The chief executive of newspaper publisher Trinity Mirror resigned after a storm of protest about her £1.7 million salary. She’d been in the job since 2003 and during that period she’d earned more than £14 million. Although that’s peanuts compared to Sir Martin’s wages, Trinity Mirror’s share price had lost 90% of its value under her reign and Sly had to jump. And, like the Arab Spring, there is a strong possibility of collateral damage still to come. The Mail on Sunday suggests that Jane Lightning, chairwoman of the company’s renumeration committee, will come under pressure to quit this week. Jon Rees reports: “Top ten shareholders in Trinity told Financial Mail they would vote against Lightning’s re-election as director on Thursday. She gave the green light to the pay scheme for Bailey.” According to The Sunday Times the main movers behind the Trinity Mirror shareholders’ protest were Aviva Investors, which are wholly owned by Aviva PLC. Ironically, Aviva’s chief, Andrew Moss, is also in the firing line, according to James Quinn in The Sunday Telegraph. The paper says Aviva’s share price had plunged 61% since he took the helm in July 2007. Despite that he “received a £2.69m package for 2011 and was handed £2.54m in long-term shares”. If I were him I’d sell them as soon as possible. So what’s fuelling this big bucks backlash, which has also engulfed Bob Diamond of Barclay’s Bank and David Brennan of pharmaceutical giant Astra Zeneca? Jeff Salway in Scotland on Sunday explains: “The biggest shareholders in companies such as Barclays are institutional investors such as pension funds and life insurers. “But they invest billions of pounds on behalf of millions of ordinary savers – a growing number of whom feel angered by the pay packets given to top executives.” Some fat cat sportsmen are also caught up in cash controversies this week. Alex Hawkes in The Mail on Sunday reports: “Top footballers including Wayne Rooney have thrown down the gauntlet to the taxman after putting their money into an investment plan that could save millions of pounds on their income tax.” The article explains that at least a dozen wealthy sportsmen including Ryan Giggs, Kenny Dalglish, Sam Allardyce and Rory McIlroy have backed Waverton Property, which has invested £145 million to convert a Birmingham warehouse in to a data centre. The promoters say this is different from the controversial film tax schemes that saw celebrities write off their income tax bills while investing very small sums in the British film industry. I’m sure Rooney and Co will be reassured, because the same paper reports that such a film scheme which attracted Manchester United boss Sir Alex Ferguson and former England manager Sven-Goran Eriksson was last week ruled illegal. It means Sir Alex and Sven will have to pay their taxes after all, although they will no doubt be interested to hear that the three directors of the company are following in the fat cat footsteps of Bailey and Moss. Despite the scheme’s failure they earned £17.5 million between them.