De La Rue has been rocked by a shareholder rebellion over the pension deal for its outgoing chief executive in the latest headache for the under-fire banknote printer.
More than 48 per cent of votes were cast against the pay report of the London-listed company at its annual meeting on Thursday as it became the latest to suffer an investor protest over pensions.
De La Rue, which makes almost a third of the world's banknotes including those for the Bank of England, became the subject of shareholder ire over a £132,000 payment into chief executive Martin Sutherland's pension pot, equal to 30 per cent of his base salary.
Executive pensions have become a focal point for investors this AGM season. The UK's revamped corporate governance code requires the contribution rates for executive directors — or payments in lieu — to be aligned with those for the rest of the workforce.
Companies such as Standard Chartered have also faced investor protests over the size of payments to executives as investors push for more prudent pay packages. Others, such as Lloyds Banking Group and Aviva, have taken steps to head off a backlash from shareholders and staff over pension the size of pension contributions for their executives.
The influential proxy adviser ISS recommended investors voted against the company’s remuneration report.
The narrow margin of approval for De La Rue's pay report comes at a period of intense pressure for the company, however.
On Tuesday it disclosed the Serious Fraud Office was investigating its operations in South Sudan over suspected corruption, a revelation that came too late for investors who voted by proxy in Thursday' s shareholder meeting.
De La Rue is also grappling with an activist investor, Crystal Amber, and broader pressures. In May it announced Mr Sutherland would be stepping down as chief executive as it warned on profits for the year ahead and an £18m hit from the failure of the Venezuelan central bank to pay its bills in the wake of economic sanctions. Its chairman and senior independent director have also announced plans to exit.
A new chief executive has yet to be named.
De La Rue said on Thursday it was “disappointed with the lower level of support” from shareholders on its pay report. It said “sometimes contrasting factors” had been behind the votes and it would seek to engage with shareholders over its new remuneration policy.
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