Shareholders in Pearson (PSON) yesterday rejected the Remuneration Report on a vote at the company’s AGM. That was by 61% opposed to 32% supporting with 6% abstaining. But they approved the Remuneration Policy.
Opposition to the Report seemed to be based on the fact that CEO John Fallon achieved a 20% rise in total pay despite a record loss and several profit warnings.
However the share price rose on the day substantially by 12% perhaps because of a positive first quarter trading statement issued in the morning in certain areas, although the overall 2017 outlook guidance was unchanged.
What is puzzling is that the remuneration votes at Rolls-Royce the previous day were passed with ease, where there were similar negative comments by ShareSoc, some proxy advisory services and the media on the bonuses achieved by CEO Warren East even when underlying profits fell substantially. See my previous blog post for more information. Why did that revolt turn into a damp squib, when it was just as justified as the opposition to pay at Pearson?
Is this simply the perversity of institutional voting, better communications from the company or was there some other specific reason?