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Last Updated: Monday, 30 June, 2003, 11:05 GMT 12:05 UK
Bosses 'overpaid and untrustworthy'
Shareholder protests at GlaxoSmithKline AGM
Are shareholder revolts changing public opinion?
Directors of the UK's biggest companies are overpaid and untrustworthy, according to the majority of people interviewed for a MORI poll.

The survey, commissioned by the Financial Times (FT) newspaper, found that 80% of respondents believed top company bosses couldn't be trusted to tell the truth.

It also suggested 78% of people agreed that company directors are paid too much.

The findings follow a wave of shareholder revolts against the huge pay packages awarded to directors in large companies, which the FT said "is having a deep impact on public attitudes".

Further protests are expected this week by shareholders in the DIY giant Kingfisher, owner of the B&Q and Comet chains.

Rewards for failure?

At advertising group WPP, shareholders only narrowly approved a generous pay-deal for the group's chief executive Sir Martin Sorrell.

The National Association of Pension Funds had urged share holders to abstain in the vote, and indeed 47% of large institutional shareholders indeed abstained or rejected outright the three-year rolling contract for Mr Sorrell, which guarantees him three year's worth of pay even if he were ever sacked for failing to do his job.

Companies will be frustrated by these figures because the reality is that most large companies are well run
John Cridland, CBI

Shareholders are concerned that Sir Martin's contract, just three years long, offers him a generous pay-out if he were ever ousted.

This, they argue, could be seen as encouraging potential rewards for failure.

"We are not suggesting that people on more than one-year contracts sit around doing nothing, but there is a risk that they could be rewarded when they don't perform," said a spokesman for the National Association of Pension Funds (NAPF).

Frustrating figures

The MORI poll also suggested the public is deeply sceptical about company obligations towards their staff.

Nearly 25% of those questioned believe company pension schemes are not worth joining and two-thirds of respondents said firms could not be trusted to honour pension commitments.

"Companies will be frustrated by these figures because the reality is that most large companies are well run, satisfying their shareholders and playing a full role in their local communities," said John Cridland, the deputy director-general of the Confederation of British Industry (CBI).

But shareholder concern is now being translated into real cutbacks for directors, following the first defeat over executive pay at pharmaceutical group GlaxoSmithKline last month.

Its shareholders refused to back million pound pay deals for executives, particularly a controversial "golden parachute" pay package for chief executive Jean-Pierre Garnier.


SEE ALSO:
Glaxo defeated by shareholders
19 May 03  |  Business
Row over rail bosses' bonuses
23 Jun 03  |  Business
Want a pay rise? Threaten to leave
25 Jun 03  |  Business
Vodafone boss pockets 10m pension
13 Jun 03  |  Business



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