(Recasts with shareholder vote)
By Ron Bousso
LONDON May 16 Shareholders at British energy
services firm Kentz rejected top managers' pay and
bonuses on Friday, the first time a London-listed company has
been forced to review its executive remuneration policy.
Before 2013, shareholder votes on bosses' rewards at annual
meetings were only advisory, but growing public discontent about
high levels of executive pay led the government to make the vote
A majority of shareholders in Kentz, which provides
engineering and construction services for the oil and gas
companies, voted against two resolutions on pay and bonuses at
the company's annual meeting.
The revolt prompted a swift response from Kentz, which said
it had already started talks with shareholders to resolve the
Under the defeated remuneration plan, Chief Executive
Christian Brown was to earn up to $4.4 million including a base
salary of $803,400.
One of the main points of contention was a clause allowing
Kentz's remuneration committee to offer discretionary payments
in "unforeseen and exceptional" circumstances without requiring
shareholders' approval, a company official said.
"Management is obviously disappointed but they will consult
with them (shareholders) and come back to them," the official
Investors holding nearly 38 million shares out of a total of
around 84 million shares voted against one resolution with
holders of more than 10 million shares abstaining.
On the second resolution, holders of nearly 42 million
shares voted against and above 7 million shares abstained.
Historically, investors have voted overwhelming in favour of
the resolutions tabled by companies, with typically more than 90
percent suportsing all resultions.
But investors have become more willing to vote against
management in recent years, in response to weak corporate
performance and perceptions that that pay is excessive.
Nonetheless, it is rare for more than 50 percent of
investors to oppose pay or the appointment of directors.
"Any votes that are starting to get into 20 percent of
people saying no, indicates it's not just a single vote
shareholder and is attracting institutional support," said Alan
MacDougall, managing director at shareholder advisory firm PIRC.
"If you look at the oppose votes and the abstentions,
anything that gets you over 30 percent when you combine the two
is really sending a message to the board."
Earlier on Friday, Kentz said it has a record backlog of
orders, defying a slowdown in the industry by offering an upbeat
Its shares closed nearly 3 percent lower, underperforming a
1.4 percent drop in the FTSE mid-cap index
(Additional reporting by Simon Jessop and Tom Bergin; Editing
by Erica Billingham)