Balfour Beatty suffered a significant revolt among shareholder ranks over the firm’s remuneration report at its AGM yesterday.
Shareholders holding nearly a third of the stock voted against accepting the 2014 remuneration report, which included terms for doubling Steve Marshall’s salary to £531,500 during the eight months that he acted as executive chairman.
The protest vote reflected a groundswell of shareholder concern about the previous boards’ pay after a performance that saw Balfour Beatty rack up a total trading loss of £391m last year.
After the London AGM, Balfour issued a statement that said: “The company notes the significant number of votes cast against Resolution 2, the advisory vote on the directors’ remuneration report.
“As shareholders are aware, 2014 was a challenging year for the company and the remuneration committee had to deal with a number of non-standard issues.
“The board takes its responsibility to engage with investors seriously and, therefore, will conduct a thorough assessment of the feedback received.”
Marshall became executive chairman last May following the abrupt departure of chief executive Andrew McNaughton.
He received a temporary increase in his annual fee from £265,750 to £531,500 “to reflect his additional responsibilities and time commitment,” Balfour Beatty said in its remuneration report.
The move saw his role changed from an average two-day a week commitment to attending the unprecedented 26 board meetings as Balfour battled with problem contracts, sought to sell Parsons Brinckerhoff and became entwined in failed merger talks with Carillion.
Group finance director Duncan Magrath, who left Balfour on 6 May, also received an interim responsibility allowance of 20% of salary paid monthly up to 31 March 2015.
In total, Magrath received £759,994 in 2014, including £166,803 from a long-term incentive plan.
Iain Ferguson, chairman of the remuneration committee, stated in his report: “The Committee considers that both adjustments were entirely appropriate in the absence of a chief executive during a period of significant corporate activity.”
The report also reveals that new group chief executive Leo Quinn will see his annual incentive plan include cash targets for the first time at the group.