Punch shareholders vote down ‘excessive' directors' pay package
Shareholders in recession-hit pub landlord Punch Taverns have voted down the latest remuneration package for the company's directors, at the group's annual meeting yesterday.
A significant 55% of investors voted against the pay report in protest at what appeared to be an "excessive" remuneration package when the firm has just announced losses of £406m. In addition the company, which has 7,600 pubs across the UK, had to write down £600m from the value of its estate.
In a quarter-one interim management statement released yesterday, Punch admitted that "profits remain under pressure", and said that rent concessions to struggling tenants was costing the company £2m a month. Shares, which peaked at £13.20 just two years ago, closed down 5% at 77p.
A similar revolt took place last year when 36% of shareholders voted against the remuneration package, but this year Punch appears to have overstepped the mark with a performance-related payout which could have seen some directors receive bonuses of 200% of their salary.
In recent years, Punch chief executive Giles Thorley has had payouts of £30m according to the Guardian, whereas an analyst last year calculated that one in four Punch tenants earned less than £20,000 a year.
Peter Montagnon, director of investment affairs at the Association of British Insurers, said: "This result is a further signal that companies must pay attention to their own performance and the economic climate when setting remuneration policy."
The ABI, whose members own about 20% of investments in the UK stock market, gave the report a "red top" alert highlighting its concerns. In particular, it focused on big bonus payments to directors in a year when the dividend was suspended.
Punch said in a statement following the meeting that it intended to conduct a "full review" of its pay policies. The remuneration committee is chaired by former Compass UK and Scandinavia chief executive Fritz Ternofsky, and members include Mike Foster, a career brewing and pubs executive, and Tony Rice, chief executive of Cable & Wireless International. It is chaired by former Compass Group chief executive Fritz Ternofsky.
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Leasehold pub market has been ‘decimated' in past year, says Fleurets >> By Janie Stamford
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