Pearson shareholders protest CEO’s pay hike
06 May 2017
Pearson shareholders protested angrily over a 20-per cent pay increase for the chief-executive of the loss-making publisher, with more than two thirds voting against the company's remuneration report.
The company expressed disappointment over the failure of the report to gain shareholder approval, with over 65.59 per cent votes cast against the resolution, at its AGM.
The development comes after the former Financial Times and The Economist owner sharply hiked chief executive John Fallon's base salary from £776,000 to £780,000, and threw in £343,000 for his annual incentive plan, which helped his pay increase to £1.5 million, even as the publisher posted its biggest loss in its history.
Pearson said, ''During 2016, Pearson engaged extensively with its major shareholders to understand their views on remuneration matters."
''We were disappointed that the advisory vote for this year's remuneration report was not passed and that, although passed, there was a significant minority vote against both our remuneration policy and the re-election of our remuneration committee chair, Elizabeth Corley.
''Naturally, we acknowledge this feedback and thank those shareholders who have already spoken with us and explained their reasons for not supporting the relevant resolutions.''
According to the company, the remuneration committee was ''committed to continuing dialogue'' with shareholders as it applied its remuneration policy in the years ahead.
Pearson expressed disappointment over the results having ''engaged extensively'' with investors before the AGM.
Earlier in the day, Fallon had sought to assuage criticism of his bonus by spending all of it, net of tax, on Pearson shares to align his own interests with those of shareholders.
Fallon said, "I'm the son of a teacher, several members of my extended family are teachers, I understand how privileged and lucky I am to have the level of remuneration that I have.
"I don't decide what CEOs get paid but I did decide once the payment was made that the right thing to do was buy shares in Pearson."
