Melrose to review pay as anger swells over ‘excessive payouts’
Melrose Industries is to review its pay policy for top bosses in the face of a potential shareholder revolt at its annual meeting.
The group, which recently sealed a controversial £8 billion hostile takeover of engineering giant GKN, has come under fire for awarding its four bosses – Christopher Miller, David Roper, Simon Peckham and Geoffrey Martin – at least £42 million each in 2017.
The payouts, linked to Melrose's 2012 long-term incentive plan (LTIP), drew criticism from shareholder advisory group Glass Lewis, which is urging investors to vote against them.
But Mr Miller said ahead of the firm's AGM yesterday said that it will "consult with shareholders" over its remuneration policy.
"Given the recent acquisition of GKN, your board intends to review the existing Melrose remuneration arrangements and expects to consult with shareholders in the coming months," he said.
The comments come after Glass Lewis said it has "severe reservations about supporting the remuneration report at this time. All executives received what we consider to be excessive payouts under the plan".
"As such, we are unable to recommend that shareholders support this proposal."
The pay concerns threaten to thrust Melrose back into the public eye just weeks after its fight to take over GKN, which drew union and political anger.
Its victory brought to a close a bitter battle that had raged since January, with unions and MPs warning over job cuts, asset stripping and national security concerns throughout the takeover saga.
Last month Business Secretary Greg Clark cleared Melrose's takeover of GKN, refusing to block it on the grounds of national security.
GKN is a 250-year-old global engineering business headquartered in Redditch which employs around one-tenth of its 60,000 staff in the UK.
It has a wheels and structures plant at the Hadley Castle Works in Telford as well as other factories doted around the Midlands, with about 1,000 workers.
Speaking yesterday, Mr Miller said: "We are very excited by what is in store for Melrose over the next few years.
"We look forward to working with the GKN employees to transform the prospects of the businesses through significant investment."
