FBD, ICG and Uniphar under fire over executive pay

Advisory firms to big corporate companies critical of top-level remuneration ahead of agms

FBD, Irish Continental Group (ICG) and Uniphar face potential backlashes over executive pay at their upcoming annual general meetings on foot of opposition from influential shareholder advisory groups.

Glass Lewis, which advises big investment firms on corporate governance issues, recommended that shareholders vote against insurer FBD’s remuneration report at its annual general meeting (agm) next Wednesday, taking issue with a 10 per cent salary increase for finance director John O’Grady last year, to €308,000.

“Glass Lewis views high fixed pay raises with scepticism, as such remuneration is not directly linked to performance and may serve as a crutch when performance has fallen below expectations,” the firm said. “At a minimum, we expect a company to provide a thorough and convincing explanation for significant increases in base pay, which this company has failed to do.”

Another proxy advisory firm, Institutional Shareholder Services (ISS), highlighted concerns around the lack of disclosures in FBD’s annual report on the breakdown of former chief executive Fiona Muldoon’s €700,000 remuneration last year, including payments arising from her “service agreement” as she resigned last May.


Still, it recommended that shareholders approve FBD’s remuneration report at the agm. Executives received no bonuses last year as earnings targets have not been met. Its pretax profit plunged 96 per cent to €4.8 million, mainly as a result of it setting aside a provision of €65 million for its exposure to pub claims under business interruption policies triggered by Covid-19 restrictions.

Lack of disclosure

Glass Lewis has also called on ICG shareholders to vote against its pay report at its agm next Wednesday, citing concerns about the lack of disclosure around the ferries operator’s long-standing chief executive Eamonn Rothwell’s bonus arrangements.

“The current ceo [chief executive] has a confidential legacy contractual provision in place that will operate as part of this remuneration policy,” it said. “Pursuant to this arrangement, Mr Rothwell appears to be eligible to receive unlimited remuneration through the annual bonus plan. We believe this runs contrary to best practices and shareholder interests.”

While Mr Rothwell received no performance-related bonus last year as ICG slid into a net loss, his bonus of more than €1.5 million for each of the two previous years amounted to between 275 per cent and 285 per cent of his salary. ICG said in its annual report: “While certain aspects of the company’s approach to incentivising and rewarding executives is bespoke compared to other Irish and UK peers, it has been designed to align with the values of the business; and, in an effort to drive truly meaningful alignment through a market-leading focus on equity and long-termism.”

Meanwhile, ISS is urging Uniphar investors to reject the pharmaceutical wholesaler and retailer's financial statements at its agm, also next Wednesday, to make a statement against its executive remuneration report, which is not being put before shareholders as a standalone resolution. Uniphar extended the vesting date for its stock bonus plan out to 2024. The Dublin-listed company said that this was to align awards to its strategy of doubling earnings within five years of its 2019 initial public offering.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times