A further rattling of the tea cups during this shareholder spring of investor agitation has emerged at Spirax-Sarco Engineering.
The British-based advanced manufacturing company does most of its business overseas and has, for the most part, ridden out the recession.
Last year, profits were up 7 per cent at £132 million and the shares had tripled over the past three years. Yesterday, however, it admitted that at its annual meeting last week it had fallen out with substantial numbers of its shareholders.
A company statement to the Stock Exchange revealed that investors speaking for 32 per cent of the shares voted against or abstained when asked to approve the directors’ remuneration report. Investors speaking for 33 per cent of the shares voted against or abstained in the poll to reappoint the chairman, Bill Whiteley.
At issue was apparently arbitrary ex gratia payments to Mike Gibbin, the company’s former North American boss. Spirax-Sarco reported last autumn that Mr Gibbin had “resigned to pursue other interests”. However, the company’s annual report revealed that he was paid £387,656 in lieu of one year’s notice and £112,344 as compensation for loss of office.
The small print showed that he was paid a further £283,659 in cash to settle what he might be owed under the directors’ performance share plan. He was also paid £1,000 to cover legal expenses and £13,000 “in respect of tax and outplacement advice”.
The revolt is understood to have been a statement against the chairman for overseeing the multiple payouts and dissatisfaction at the dearth of independent oversight on the board.
Spirax-Sarco has admitted that the number of executives on the board has occasionally outnumbered the independent non-executives — a breach of corporate governance best practice. The company said that it believed its international regional executive heads should have board status.
The company put out a note to the Stock Exchange indicating that all resolutions had passed the day after the annual meeting. It said that it had put the detail of the polls on its website. “It was not a case of trying to avoid attention,” a spokesman said.
He added that much of the revolt had come from smaller shareholders, rather than its big institutional shareholders which include BlackRock, Schroders and Legal & General.
