Sage Group, the FTSE-100 software program supplier, is braced for an investor backlash after proposing massive will increase to new executives’ potential pay packages.
The advice units up a potential flashpoint at one of many first AGMs of one in every of Britain’s largest blue-chip corporations to be held in 2025 and comes at a time when the position of boardroom pay in bolstering Britain’s financial competitiveness is once more being intensely debated.
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Sage is proposing to amend its pay coverage to allow it to extend the utmost degree of variable pay which could be awarded to new government administrators from 500% to 825% of base wage within the first 12 months of employment.
That determine contains a most bonus alternative of 175% of wage, and an enhanced long-term incentive (LTI) award, capped at 650% of base wage.
“Material concerns are identified with both the quantum and nature of the LTI award.
“Within the spherical, assist will not be thought-about warranted for the remuneration coverage.”
ISS’s suggestions are broadly adopted by institutional shareholders, though its peer, Glass Lewis, has backed Sage’s proposed pay coverage.
Roisin Donnelly, the non-executive director who chairs Sage’s remuneration committee, mentioned: “We have valued our engagement with ISS and other proxy advisers over the past year.
“We took their suggestions under consideration when finalizing our proposals and are dissatisfied ISS has come to this choice, significantly in mild of efficiency.
“We believe the proposed remuneration policy changes will help align executive pay with FTSE 100 and global technology benchmarks, emphasize pay-for-performance, and position Sage to retain and attract top talent globally.”
Sage can be proposing to extend the LTI factor of its present government administrators’ pay packages from 300% to 400% of wage, though ISS mentioned this had not shaped a part of its choice to oppose the coverage.
“Managing succession risk is a key responsibility for the board and so the remuneration committee considered what would be required in a recruitment scenario.
“In that context, we consider it’s prudent to incorporate, solely inside the recruitment provision of the Coverage, extra flexibility to make sure we may provide a sufficiently aggressive remuneration bundle to draw high-calibre government director candidates from the worldwide expertise expertise market.”
One investor mentioned they backed the choice of Ms Donnelly to suggest the adjustments given the worldwide nature of the markets by which Sage operates.
Steve Hare, the corporate’s chief government, has been with the corporate since 2014, whereas Jonathan Howell, its finance chief, has held that position for almost seven years.
Their size of service signifies that figuring out successors for each can be a precedence for Mr Duff within the coming years, with Sage’s board more likely to conduct a world seek for each.
On Wednesday afternoon, shares in Sage have been buying and selling at 1338.7p, having risen by almost a fifth during the last 12 months.
The corporate has a market valuation of about £13.2bn.
