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March 27, 2013 3:52 pm
Mr Kapoor’s basic package of £2.9m, including annual cash bonus, was 32 per cent higher than the previous year on a pro-rata basis. However, it is still a far cry from the £92m his predecessor Bart Becht received in 2009, setting a high watermark for executive pay.
Mr Becht, the best-paid chief executive in the FTSE 100, scooped the jackpot after a decade-long, stellar stock market performance at Reckitt delivered him big gains from share options.
Reckitt began losing its sparkle towards the end of Mr Becht’s reign, and investors are divided on the success of Mr Kapoor’s strategy of realigning the company – better known for its household products – along health and hygiene lines, with the creation of new geographic hubs.
The company’s hold on the highly profitable anti-opiate addiction treatment market was last month opened to competition, with the US regulator giving the green light to two manufacturers to produce rival generic versions of its drug Suboxone.
Last year Suboxone contributed slightly less than 9 per cent of sales and 22 per cent of operating profit.
None of this has prevented Reckitt from participating in a more general re-rating of consumer staples, however, and its shares are up 20 per cent in the year to date, comfortably outpacing the broader market.
Investors, who have queried elements of Reckitt’s remuneration strategy, were broadly relaxed about Mr Kapoor’s payout.
However, the remuneration committee noted in its report that it had received “some comments and concerns over the last year around executive director service contracts, the size of our long-term incentive performance contracts, and the sole use of earnings per share in our LTIP”.
Judith Sprieser, chairman of the remuneration committee, wrote in the report: “Our service contracts are now consistent with best practice and the committee continues to review the structure and level of LTIP awards to ensure they continue to align with shareholders’ interests.”
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