Imperial Brands (LON:IMB) has unexpectedly scrapped its new executive pay policy, saying that it would not put it to a vote at its upcoming annual general meeting (AGM). The move comes amid calls from Prime Minister Theresa May for companies to moderate executive pay.
Imperial Brands’ share price has been steady in London in today’s session, having added 0.44 percent to 3,676.00p as of 13:15 GMT, slightly outperforming the broader London market, with the benchmark FTSE 100 index currently 0.18 percent better off at 7,177.00 points. The group’s shares have gained about 2.4 percent over the past year, as compared with an over 21-percent rise in the Footsie.
Imperial Brands announced in a statement today that it no longer intended to seek shareholders’ approval for a proposal to amend its existing directors’ remuneration policy at the group’s upcoming AGM on February 1. Bloomberg noted in its coverage of the news that the change would have given chief executive Alison Cooper a £3-million raise.
“We have been actively engaging with shareholders for some time and while we received considerable support, it is clear that views have changed over that time and that the right course of action now is for the Board to withdraw the resolution,” chairman Mark Williamson said in the statement.
The move comes amid growing pressure on companies to moderate executive pay. Stefan Stern, director of research group High Pay Centre, told Bloomberg that Imperial Brands’ retreat marked “the first sign that some institutional shareholders are going to take a tougher line on pay packages this year”.
Reuters meanwhile reported that Aberdeen Asset Management, the 12th biggest investor in Imperial Brands according to Thomson Reuters data, had welcomed the tobacco group’s move.
“Remuneration policies need to be simple and reflect the broad context,” Aberdeen's deputy head of UK and European Equities, James Laing, said, as quoted by the newswire. “Hopefully when it comes to formulating the revised remuneration policy this will be fully reflected in the engagement with shareholders.”