Greencore shareholders have been urged by a leading corporate governance advisory firm to vote against the sandwich and prepared meals giant's pension contribution to its chief executive Patrick Coveney – equating to 35 per cent of his salary.
Proxy advisory firm Institutional Shareholder Services (ISS) said the €315,000 pension award, payable in cash in lieu of participating in a group scheme, and chief financial officer Eoin Tonge’s 25 per cent-of-salary pension were “exceptionally high relative to typical market practice”.
"While the pension provisions for the incumbent [executive directors] have been frozen in monetary terms, they remain significantly higher than is typical in the UK market, and are out of step with the market's direction of travel following the publication of the 2018 UK corporate governance code," said ISS in a report ahead of Greencore's annual general meeting (agm) on January 28th.
“The overall positioning of fixed pay at Greencore remains an ongoing area of concern, and the company has not committed to bringing down the level of pension contributions...over the near-term.”
Mr Coveney’s total remuneration for the year to September was €2.35 million, while Mr Tonge’s package, denominated in sterling, equated to €1.21 million.
ISS noted, however, that Greencore has put new executive directors on pension rates aligned to the group’s workforce.
As such Peter Haden was granted a contribution equivalent to 8 per cent of salary on his appointment as chief operations officer and to the executive board last May. Mr Haden announced in November that he was quitting the company.
Disparity
A spokesman for Greencore said the food group’s board “supports the principle of reducing, over time, the disparity in pension contributions between executive directors and the wider employee base”.
“The board’s remuneration committee has taken a number of material steps towards this by introducing a cap on the value of annual pension contributions for incumbent executive directors with legacy contractual commitments and also by introducing a policy whereby all newly appointed executive directors receive a pension contribution equivalent to the contribution available to the wider workforce,” he said.
“The remuneration committee will keep its approach to incumbent executive directors’ pension contributions under review in light of developing market practice and shareholder expectations.”
The outcome of the agm vote on Greencore’s remuneration policy is non-binding.
Glass Lewis, another proxy advisory firm, said while shareholders “may be wary of the relatively high” CEO and CFO pension contributions, it has recommended that shareholders approve the remuneration policy.
