Thursday 20 September 2018

Proxy firm Glass Lewis criticises C&C's executive bonus scheme

C&C's wage policy hit the headlines earlier this month with the publication of its annual general report (Peter Byrne/PA)
C&C's wage policy hit the headlines earlier this month with the publication of its annual general report (Peter Byrne/PA)

Gretchen Friemann

Glass Lewis, an influential proxy advisory firm, has flagged concerns with C&C Group's executive bonus structure ahead of the cider and beer maker's annual general meeting in Dublin next week.

A "failure" to break out the targets the pay incentives are tied to and the metrics used to assess performance attracted scrutiny although both Glass Lewis and its peer, ISS, urged investors to support C&C's remuneration report.

The drinks group's wage policy hit the headlines earlier this month with the publication of its annual general report, which showed its five executive directors took home a combined €2.53m last year, marking a near 15pc increase on the previous year. However that uplift was accounted for largely by foreign exchange fluctuations along with a level of churn on the board. C&C's shares have fallen by over 3pc in the past year and in May the group posted a 5pc drop in full-year revenues to €548m in May, along with a 7pc fall in group operating profit to €86.1m. The lacklustre performance resulted in C&C's executives receiving a fraction of their potential short-term bonus awards.

Its policy allows for a payout of 100pc of the base salary, but in 2018 this was cut to 80pc and the final award amounted to just 14.4pc of the fixed salary.

However Glass Lewis took issue with the failure to disclose specific targets, even though it described its reservations as "largely mitigated" by the fact the group made no payout under the undisclosed benchmark and has pledged to provide the information retrospectively once the bonus is triggered. Glass Lewis also said it expects Stewart Gilliland, the current chairman of the remuneration committee, to resign from this post "in due course" given his new status as group chairman. Brian Stewart, who has chaired the group for eight years, announced his resignation last month with Mr Gilliland set to be elected as his replacement at the AGM.

Irish Independent

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