April 27 (Reuters) - Aggreko Plc, the world’s largest temporary power provider, said on Thursday it had withdrawn a proposed executive pay policy after some investors disapproved of a new restricted share plan (RSP).
The company has been looking to switch its remuneration policy to more “fairly align” shareholder and management interests as it contends with challenging market conditions.
Against this backdrop, the company said on Thursday the RSP plan was supposed to reduce the amount of annual bonus and awards under a Long Term Incentive Plan, while increasing the amount of Aggreko shares management members have to hold.
The company said that while a substantial majority of shareholders it consulted were in favour of the new pay policy, fewer backed the RSP and it had, therefore, decided to scrap both resolutions.
“Whilst both resolutions would have gained majority support, the level received for the RSP element is not one that we are comfortable proceeding with,” Chairman Ken Hanna said in a statement.
Aggreko, whose kits power major events and cover electricity shortfalls, has been hit by lower demand for its generators from North American oil and gas customers, who cut spending after commodity prices slumped.
It has also had to price in a “significant” discount to secure a 200 megawatt contract in Argentina — its single largest market. This move lead to Aggreko issuing a profit warning in March.
It was not immediately clear why Aggreko’s RSP proposal had garnered lower investor support.
London-listed companies have in recent years seen an increase in investor discontent over high executive pay levels. A number of pay reports have been turned down this year, including housebuilder Crest Nicholson’s.
Aggreko said its existing remuneration policy that was approved by shareholders in 2015 would remain in place for this year. The company would engage with shareholders to introduce a revised policy for approval next year, it added. (Reporting by Esha Vaish in Bengaluru; Editing by Toby Davis)