Oil rig builder Lamprell sees shareholders revolt over pay again

Oil Barrels

Lamprell has suffered a big pay revolt at its annual general meeting – the third year in a row that shareholders have rebelled against pay deals at the oil rig builder.

About 40% of votes opposed the company's remuneration report, its remuneration policy and changes to its 2008 share plan. Lamprell suffered the revolt at Monday's meeting in Dubai even after it claimed to have consulted its shareholders on pay.

Announcing the vote, Lamprell said: "In light of the vote at the AGM, our remuneration committee will re-engage with our shareholders on the company's remuneration policy.

"We are committed to ensuring that our remuneration policy (and in particular the long-term incentive plans) takes account of shareholders' views and at the same time enables the company to implement its strategy through an appropriately incentivised management team."

The revolt centred on shares awarded to James Moffatt, the chief executive, when he joined last March. Moffatt was meant to get the shares, worth $753,000 (£449,000) at the time, before 21 March but because the company was in a long restricted period when awards could not be made this was not possible.

Lamprell has now granted Moffatt the shares and they will be tested over the three years to March 2016, according to the company's long-term incentive plan. Moffatt also got a $208,000 signing on payment to compensate for payments he missed out on at his former employer.

The company had a 41% vote against its pay policy. That vote is binding and a slightly bigger rebellion would have forced Lamprell to rewrite its pay plans. Some 41% of shareholders also voted against last year's pay report and 39% against changes to the performance share plan.

The pay rebellion follows a rocky period for Lamprell. The Financial Services Authority fined it £2.4m last March for failing to tell shareholders promptly about problems that led to five profit warnings. As the warnings mounted up, its former chief executive Nigel McCue was ousted in October 2012 followed by the finance director and chief operating officer.

There were pay protests at each of its previous two annual meetings as financial problems mounted. There has been a series of rebellions at this year's AGMs with Standard Chartered, Barclays and HSBC hit by shareholder disapproval on pay.

The company now has a new management team and financial performance has stabilised under chairman John Kennedy, who joined two years ago.

However, the remuneration committee failed to quell shareholder unease over pay after previous rebellions. In its annual report, the company said: "During 2013, the committee conducted a review of the company's remuneration policy, which took into account feedback from the 2013 AGM. A new policy was developed, which sought to address these concerns and this was shared informally with major shareholders and governance bodies in late 2013. The majority of those consulted indicated their support, although a few did not respond. One governance group reverted with several suggestions for further revisions and the committee incorporated most of these suggestions into the final policy."

Powered by Guardian.co.ukThis article was written by Sean Farrell, for theguardian.com on Tuesday 10th June 2014 16.53 Europe/London

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