A majority of shareholders voted against the remuneration of CEO Alan Jope at Unilever’s annual meeting. Unilever has proposed almost €5.4 million in compensation for its work in 2022, about a tenth more than in 2021.
At the meeting, just over 58 percent voted against the report containing the remuneration proposal. It is a consultative vote, therefore in principle without consequences. But Unilever promises to enter discussions with critical shareholders to decide next steps, the company writes.
3.8 million
The proposed remuneration consists of an annual salary of almost 1.7 million euros and a 3.7 million euro bonus. He’ll only get half of those stock bonuses after three years. Until his departure from Unilever, the Scotsman is entitled to a basic salary and eligible for bonuses. Senior financial executive Graeme Pitkethly would also benefit under the pay plans. His total compensation for 2022 amounts to €3.8 million, compared to €3.4 million in 2021.
In July, Dutchman Hein Schumacher will take over as CEO of Unilever. To facilitate his arrival, Unilever wanted to compensate him for the variable salary he is losing at his old employer, FrieslandCampina. For this he will receive 930,000 euros in shares. His fixed annual salary will be over 1.8 million euros higher than Jope’s.
Offer failed
Unilever made a failed bid for GSK’s consumer arm in early 2022. Investors were very shocked by the takeover attempt and then significantly lowered Unilever’s stake.
Voting against could still be intended to express dissatisfaction with the unexpected takeover bid for the GSK division, suggests Eric van den Hudding of the Association of Effectenbezitters. The same interest group of private investors voted in favor of the remuneration report. But Van den Hudding can imagine that those who voted against didn’t think the criteria by which Jope received a higher bonus were very ambitious.
Sales increase
“You see, for example, that it’s well rewarded for an increase in turnover, but that’s mostly due to inflation,” he says. “And the profit margin was down less than expected, but it’s still down dramatically.”
Shareholder advisers ISS and Glass Lewis tell business newspaper the Financial Times that Schumacher’s expected salary played a role in the no-vote. That high salary was not well documented and it would make more sense if the salary was increased based on achievements, according to the consultancies.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
