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Shareholder unrest over pay plan at Compass

16 February 2006
Shareholder unrest over pay plan at Compass

Almost one in five Compass Group shareholders rejected the company's £4.58m boardroom pay plan.

The proposals, which include an annual salary of £1.1m for outgoing chief executive Mike Bailey, were turned down by 17% of investors at last Friday's annual general meeting.

Shareholders voiced concerns about the boardroom's financial package for the year after the group's poor financial performance in 2005, when it made profit after tax of £1m on turnover of £12.6b.

One shareholder said: "I'm not impressed at all. This sort of thing is the scourge of the City. It raised a few eyebrows, let's just leave it at that."

Richard Singleton, director of corporate governance at institutional investor F&C, said the pay schemes needed to be re-examined when the new chief executive and chairman were in place. "There should probably be a stronger performance-linked system," he said.

Meanwhile, the company's involvement in a UN contract procurement scandal has deepened.

Documents have emerged that show two current ESS executives, Steve Kemp and Len Swain, obtained classified information about the company's performance on a UN food supply deal in Burundi.

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