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Drax, the owner of the UK’s largest power plant, suffered a substantial protest by shareholders over executive pay at its annual general meeting on Thursday.
A third of investors voted against the company’s remuneration report for last year, after ISS, the investor proxy advisor, recommended shareholders reject the resolution.
Criticism by ISS centred on share awards to the group’s chief financial officer Will Gardiner, who was appointed in November 2015.
In its report to investors ahead of the meeting, ISS said:
In 2016, the CFO received a bonus matching award equivalent to the maximum [bonus matching plan (BMP)] opportunity… No compelling explanation has been provided by the company. It also appears excessive in view of the BMP award level received by the CEO. Consequently, support for the remuneration report is not warranted.
Drax also suffered a 23 per cent vote against its new remuneration policy. ISS recommended investors support that motion, but said it some of the changes to conditions attached to share awards were “causes for shareholder concern”.
In response to the shareholder votes, Drax said:
A conditional share award made under an old remuneration policy, which some shareholders have raised concerns about, has been replaced with a new policy. This was supported by a large majority of our shareholders.
Drax chairman Philip Cox admitted before the vote that “some elements of remuneration structure could have been better explained in the previous year’s Directors’ Remuneration Report”.