Galliford Try received a shot across the boughs on Tuesday from investor lobby group PIRC, which urged shareholders to snub today’s vote on directors’ pay
Although not in the league of the Bellway bonus row, which was sparked when the criteria for awarding bonuses were changed retrospectively, PIRC was irked about insufficient disclosure relating to bonus targets and the tying of bonuses too closely to the firm’s share price.
“In view of these concerns, PIRC recommends that shareholders abstain on the remuneration report,” it concluded.
It was hardly fighting talk, and ebullient Galliford boss Greg Fitzgerald was set to take a 28% pay cut anyway – from £924,000 to £661,000, £71,000 of which was his bonus.
Neither was his bonus as big as some of his peers’ (see table, attached below). Hyder boss Ivor Catto doubled his pay to £208,000 with a £100,000 bonus, although it should be pointed out that this was only for six months’ work.
At the other end of the scale was Hugh Blackwood at Scott Wilson, who, along with the rest of the board, didn’t take a bonus. However, his basic salary has been upped as part of a plan to move it “closer to the market median” in recent years.
After urging Galliford shareholders to abstain from the vote, PIRC pointed out that the company had been stung with an £8.3m fine by the Office of Fair Trading (OFT). It stopped short of opening a whole new can of worms by questioning whether OFT fines made bonuses less justifiable. Whether the suggestion will rear its head as the fines become due is another matter.
Not that chief executives tend to tremble in their boots when PIRC fires off such missives. The reaction is normally one of weary indifference. One construction boss said recently: “They are the group that makes the most noise, so good luck to them. Whether anyone takes any notice is another matter.”
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