UK Governance Watch

FTSE 250-listed Kier Group’s suffered a shareholder revolt at its 2017 AGM after 44.16% of shareholders opposed the approval of its remuneration report. The construction and services business also saw 21.24% of shareholders oppose its remuneration policy.

The key cause for shareholder concern was the remuneration committee’s decision to award CEO Haydn Mursell a 5% salary increase, above the 3% increases granted to the other executive directors. At the same time, the committee increased executive directors’ annual bonus opportunities from 100% of salary to 125% for Mursell and 115% for the other executives.

The remuneration committee took into account shareholder feedback and decided not to award Mursell an increase in base salary for the 2019 financial year, the committee also stated that it does not expect to approve significant increases to the CEO’s salary during the three-year cycle of the remuneration policy. However, shareholders will note the committee has granted Chief Operating Officer (COO) Claudio Veritiero a 7.1% salary increase. The committee state that the increase will bring Veritiero’s salary in-line with Finance Director Bev Dew’s salary rate and will reflect the new responsibilities of his role as COO. Veritiero was promoted to COO in August following the departures of executive directors Nigel Brook and Nigel Turner.

Brook and Turner will be entitled to a £462k payment in lieu of notice on a phased basis over a 12-month period. The committee also exercised its discretion to pay both directors a full bonus in respect of the 2018 financial year since they had been a member of the Board and employed by the Group for the whole of the year. In addition, the committee exercised discretion to treat the directors as ‘good leavers’ and permit the vesting of LTIP awards granted in 2015, on the basis that the individuals had been employed for the whole of the applicable three-year performance period, and to retain 2016 and 2017 LTIP awards on a pro-rated basis.

Governance Issues at AGMs