£375,000 CEO bonus approved, despite shareholder revolt

A shareholder protest against a £375,000 bonus for SIG’s new chief executive failed narrowly, but demonstrated that executive pay remains a sensitive issue for stock market-listed companies.

The Sheffield-based firm wanted to pay out in recognition of Steve Francis’ work since February 25, having credited him with having a big impact already.

Shareholder advisory group ISS had recommended shareholders vote against the motion at the general meeting, and 44% did so.

SIG said it “welcomes the majority support for the one-off payment” but also acknowledged the “significant” number of votes against.

As a result of the revolt the firm has stated in plans to “consult with shareholders on amendments to the Directors’ Remuneration Policy” and that this consultation will include “resolution five” or Francis’ bonus.”

Francis joined SIG at the end of February on an interim basis to turnaround the fortunes of the £2bn-turnover building materials group, which saw a 9% drop in sales and falling market share in 2019, he then took the job permanently in April.

This bonus payment to Francis amounts to 65% of his base salary, and he has committed to reinvest £150,000 in SIG shares.

Today’s GM also saw shareholders approve the previously proposed capital raise of £165m.

As reported last month, as part of the Capital Raise, CD&R – a global investment manager – has agreed to invest up to £94m, with a guaranteed minimum investment of £80m.

Net proceeds from the fundraise will be used to improve liquidity, provide further resilience against the effects of the COVID-19 pandemic, deliver SIG’s new strategy and to fund the unwind of various forms of Government relief made available to mitigate the pandemic’s effects.

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