CRH boss defends his pay as 40pc of shareholders vote against bonus motion
Published 29/04/2016 | 02:30
CRH chief executive Albert Manifold has defended his remuneration package after over 40pc of shareholders voted against a motion to increase the capacity of his bonus.
The motion was to allow Mr Manifold to be awarded a maximum bonus payment of more than twice his base salary.
Mr Manifold was speaking at the company's AGM in Dun Laoghaire yesterday where he told reporters he recognised he was well paid.
"The reality of life is that CRH is a FTSE50 company it's a highly competitive sector and there are very demanding criteria for companies that operate in that sector," he said.
The CRH chief said 80pc of what he could potentially earn is based on variable performance measures against "demanding" targets.
"If I were to achieve a large portion of that potential compensation package, it would only be in the case where shareholders would themselves achieve superior returns on their investments at CRH," Mr Manifold said. Following the meeting the company said it would now discuss pay issues with shareholders.
CRH has been linked with a move for its rival LafargeHolcim's Indian unit. It's understood to be up for sale for around $1.5bn. However, Mr Manifold reiterated that CRH is focusing on generating cash and deleveraging this year. "If we saw, and it's a very big if, we saw something of such compelling value that we would be wrong to turn away from it then perhaps we might be tempted.
"But the reality of that the chances of that happening we're talking about less than 1pc," he said. The board was quizzed by one shareholder about its use of a Luxembourg financing firm.
Independent shareholder David McCabe asked the board whether or not CRH's governance committee had approved the use of the Luxembourg-based subsidiary.
CRH said that its tax structure is entirely legal and that its effective tax rate last year was around 30pc. Group finance director Senan Murphy said the tax bill for the year is effectively an aggregation of taxes paid in each of its jurisdictions.
"We do seek to maximise value for shareholders so all of our operations are legitimately organised in a tax-efficient manner," Mr Murphy said.
"We do have investment companies in Luxembourg that do look to raise finance and funding for the group and provide funding around the group."
When asked whether the tax structuring had been put to the governance committee, CRH chairman Nicky Hartery said: "All I can say to you very clearly is, legitimate tax structuring is employed so it would have been approved through the process as and when it came through the process."
While Brexit remains a threat to the firm, most of its UK business remains local with small amounts of imports and exports. "It's more an issue for Europe and Britain generally if there is a slowdown in confidence and a slowdown in economic activity," Albert Manifold said. "That's what would concern me but of course you don't know what other action could be taken to prevent a potential slowdown."
CRH is poised to deliver earnings before interest tax, depreciation and amortisation (EBITDA) of almost €1bn in the first half of this year.
Prior to the merger of its rivals Holcim and Lafarge, CRH spent €6.5bn on the acquisition of some of their assets.
Proforma sales at the company in its first quarter, which is typically a quiet time for the firm, rose by 9pc.