Aston Martin facing shareholder rebellion over CEO’s pay

Aston Martin shareholders are gearing up to rebel against executive pay just months after the firm’s £4.3bn initial public offering last year.

Several investors plan to reject chief executive Andy Palmer’s pay packet, according to Sky News. It comes after the world’s biggest proxy shareholder voting company, Institutional Shareholder Services (ISS), recommended investors oppose Aston Martin’s future pay policy.

In an investor report, ISS said: “The main concern with the proposed [remuneration] policy is the overall quantum of variable pay on offer for the group CEO at 500% of salary.

“This is considered well above the company’s current positioning and size, particularly when considering the relatively high salary level.”

Although the vote on future pay is binding, there is no chance Aston Martin will lose the ballot because just 32% of its stock is public. Private equity firm Investindustrial and Kuwaiti sovereign fund Investment Dar hold most of the business.

Imelda Walsh, chair of Aston Martin’s remuneration committee, said in a statement issued to Sky News that it had undertaken “detailed engagement with shareholders…both in terms of the development of the remuneration policy and on the performance targets to apply to our first award under the new long-term incentive plan”.

“Our approach is consistent with the remuneration policy outline and principal terms of employment set out in our IPO Prospectus.

“The committee has also given much consideration to current circumstances, in particular the fact that our current share price is significantly lower than at the time of the IPO, and has made changes to certain elements of our approach to remuneration for 2019 to reflect these.”

In March, Aston Martin stressed the seasonality of its performance after revealing it lost more than £1m a week in the first quarter of the year.

The luxury car manufacturer has endured a difficult first year as a public company, with its share price dropping 55% and wiping nearly £2.5bn off the company’s value since its float last October.
For the three months to March 31, the company recorded pre-tax losses of £17.3m – a £20m reversal on a year earlier.

Revenues were up 6% to £196m in a “seasonally small quarter”. It only sells around 15% of its annual total of vehicles in the January-March period.

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