Shareholders revolt over Drax executive pay

Drax has faced an embarassing shareholder backlash for “excessive” remuneration plans, adding insult to injury as protests tainted its AGM last week.

Just over a third (33.7%) voted against chief executive Dorothy Thompson’s £1.6m payout at the meeting, which is 27% higher than her total salary during the year.

Underlying earnings for 2016 stand at £140m, said the company. Although this reached the board’s expectations, it was £29m below earnings in 2015. Drax said this reflected the continuation of challenging commodity markets and the removal of climate change levy exemptions.

Despite this, Drax said 2016 had been a “pivotal” year for the business.

However it was reported early last week that shareholders were unhappy with remuneration packages for the year, with shareholder proxy voting adviser ISS critiquing the “excessive” packages received by some of the management team. Along with Thompson, chief financial officer Will Gardner is looking at a package of £1.4m shares after joining in 2015.

The company’s AGM last week was also tainted by climate change protests in York, at major investor Schroders in London and at a Liverpool site. Drax insisted that it “never” causes deforestation or sources, only sourcing wood for its biomass project from officially protected areas.

Philip Cox, chairman of Drax said in a statement that the board of directors had “noted” the “significant” number of votes against the 2016 remuneration report, but that the remuneration committee had consulted its major shareholders, most of which had supported the approach taken by the board during the year.

“Discussions have already taken place with a number of institutional shareholders who did not support the remuneration report or remuneration policy resolutions,” he said.

At the time, a Drax spokesperson told TheBusinessDesk.com: “All payments and awards to directors were in line with the remuneration policy.”