ShareSoc Deplores Excessive Pay for BG Group CEO

PRESS RELEASE 62 (28/11/2014)

On the 15th December BG Group have called an EGM at which shareholders are being asked to vote in favour of an outsized pay package for incoming CEO, Helge Lund.

Mr Lund was previously CEO of Statoil, a company which turned over £57bn in 2013, compared with £12bn for BG Group. At Statoil, Mr Lund’s total taxable remuneration in 2013 was £1.3m. BG Group are now proposing a package with a base salary of £1.5m and annual and long-term bonuses that can amount to up to 8 times that base salary (and an expected “on target” annual payout of £5.5m, in addition to base salary, pension and other benefits). As if this were not already generous enough, shareholders are now being asked to approve an extra “conditional award of shares”, with a face value of £12m, as a golden hello on top. That is in addition to a relocation allowance of £480,000 and a further payment of up to £3m, to compensate for the loss of Statoil variable pay that Mr Lund will forfeit on his departure from his former employer.

There is no evidence that such outsize pay and bonus awards lead to improved performance. On the contrary, this report from the High Pay Commission, shows that high pay is negatively correlated with company performance: Surely the banking crisis has taught us the danger of a high bonus and target-driven culture leading to poor corporate governance and poor long-term performance?

ShareSoc urges all BG Group shareholders to put their foot down and vote against this proposed resolution. We cannot succumb to the blackmail implicit in the statement included in the circular that: “Mr Lund is not obliged to join BG Group if the Conditional Share Award is not approved by shareholders”. We support ShareAction’s call to pension fund holders to press their fund managers to hold BG Group’s directors to account:

For further information, please contact:

Mark Bentley,
Director, ShareSoc
Telephone: 01582 526174 

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Postscript: BG Group soon did an about face on this matter and called off the EGM. See this blog page for ShareSoc’s comments:

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