LONDON – A significant minority of investors at Insurer Prudential voted against Chief Executive Tidjane Thiam's 2012 pay deal on Thursday, delivering a rebuke to leadership already under fire for their handling of a failed Asian takeover.
Shareholders representing nearly 12 percent of the company's capital at its annual general meeting in London voted against approving Thiam's 7.8 million pound pay and benefits package - up from 4.7 million pounds a year earlier.
The dissenting vote was far less pronounced than a protest by shareholders last year, part of a broader debate over the scale of executive pay deals in Britain. But it was still far higher than the average for dissent at such meetings.
Normally management decisions are simply waved through by the fund managers who tend to hold the bulk of shares in insurers and other major companies and the vote suggested at least some may have been expressing their disapproval of Thiam.
In March the firm was fined 30 million pounds and Thiam was censured for failing to inform British regulators about its $35.5 billion takeover of Asian rival AIA <1299.HK> in 2010 which collapsed after investors baulked at the price.
Britain's then financial watchdog the FSA said Thiam played "a significant role" in the decision not to contact the regulator about the deal.
Chairman Paul Manduca struck a conciliatory tone in response, but argued high executive pay is largely caused by moves in the company's share price; Prudential shares have climbed more than 80 percent since the start of 2012.
"Remuneration is driven by the long term incentive plan and in particular share price growth and that does inflate the figures. Of course all our shareholders are enjoying that growth too but I hear what you say," he said.
The meeting stopped short of declaring Thiam unfit to hold such a senior position and said it did not consider Prudential's regulatory breaches "reckless or intentional". Few voices criticized Thiam's actual management of the company and the vote to re-elect him as a director was passed with 98 percent in favor.
The total pay pot for seven executive directors was more than 33 million pounds, according to the firm's annual report.
"I've no doubt people do work very hard but the word greedy is not entirely remote from my mind," one shareholder told board members at the meeting.
(Reporting by Chris Vellacott; editing by Patrick Graham)