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Diageo boss Ivan Menezes is ‘overpaid’, claims shareholder adviser

The chief executive of the company which owns Guinness had a total pay package of £7.9m in the last financial year


Ivan Menezes, chief executive officer of Diageo. Photograph: Jason Alden/Bloomberg

Ivan Menezes, chief executive officer of Diageo. Photograph: Jason Alden/Bloomberg

Ivan Menezes, chief executive officer of Diageo. Photograph: Jason Alden/Bloomberg

Diageo chief executive Ivan Menezes is overpaid and compared to the average employee is getting almost 70 times as much pay, according to influential shareholder advisory group PIRC.

The Guinness maker holds its annual general meeting next month, with PIRC advising shareholders to oppose a vote on approving the group’s remuneration report.

At its last annual general meeting, just over 96pc of the votes cast were in favour of approving Diageo’s remuneration report.

Mr Menezes has been chief executive of Diageo since 2013. In its last financial year, he was paid a basic salary of £1.27m (€1.41m) and total fixed pay, including benefits, of £1.62m. But he made an additional £6.2m (€6.9m) in variable pay, which included a £2.4m annual incentive and £3.8m in long-term incentives. That made for a total pay package of £7.9m (€8.8m) compared to £6m in 2021.

PIRC said that in the most recent five-year period, the average annual increase in the chief executive’s pay has been close to 81pc, whereas, on average, total shareholder return has risen by just over 18pc.

Diageo’s net sales last year were £15.4bn, which was 21.4pc higher than 2021. Its operating profit rose 26.3pc to £4.4bn on an organic basis.

The group also owns brands including Bailey’s, Smirnoff, Johnnie Walker and Tanqueray.

“Total realised rewards under all incentive schemes amounted to 490.4pc of base salary, which is considered excessive”, said PIRC of Mr Menezes’ remuneration in the last financial year.

It added that the chief executive’s pay compared to average employee pay is almost 70 times more, “which is not considered appropriate”.

PIRC noted that company executives who are directors have fiduciary and contractual duties.

“The delivery of objectives covered by these duties should not be additionally rewarded with bonuses or LTIPs [Long-term Incentive Plans], but considered part of the job,” it said.

Diageo declined to comment.

During the summer, Diageo announced plans to spend €200m building what will be Ireland’s second-largest brewery after its own St James’s Gate facility in Dublin. The new brewery will be built in Co Kildare and is expected to be operational by 2024. It will brew drinks owned by the group including Hop House 13, Kilkenny, Smithwick’s and Harp.

The new facility frees up the main Dublin site for increasing production of non-alcoholic Guinness Zero and the company’s ‘nitrosurge’ pouring device.

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