Medical equipment maker Smith & Nephew has been rocked by a shareholder revolt over proposals to increase its chief executive’s pay to almost £10m.
In what represented a bloody nose for the FTSE 100 company, 43 per cent of its investors yesterday voted against raising Deepak Nath’s maximum earnings to £9.4m.
Municipal advisory group ISS called the increase “excessive” ahead of yesterday’s vote and urged investors to block the deal.
US-based Nath is just the latest boss of a British company to seek higher pay, sparking a fresh backlash against big-shot pay.
It comes amid a debate over whether FTSE chief executives are underpaid compared to their US counterparts.
Pay revolt: Around 43% of Smith and Nephew investors voted against raising chief executive Deepak Nath’s top earnings to £9.4m
Despite the revolt, Nath’s raise was approved at the annual general meeting in Watford, as more than half of investors backed it.
The Texas-based boss will receive up to £9.4m if all targets are met, a nearly 30 per cent increase on his current £7.3m package.
After the result was announced, the company said it would “continue to engage with shareholders and proxy advisors and provide an update on future consultations within six months.”
The company wants to reduce high-level staff turnover after having four chief executives in five years.
Former boss Namal Nawana, also based in the United States, resigned from his role in 2019 after just 18 months amid a dispute over pay.
Yesterday, FTSE 250 telco Spirent – an acquisition target – also faced backlash over proposals to change its bonus structure to be more competitive in the US.
The policy was approved despite the opposition of 43 percent of its shareholders.
London-listed Spirent said the majority of its operations and sales are based in the United States, where most of its executives, including the chief executive, live.
A string of company bosses are on the verge of signing extraordinary pay deals this year despite dissent among their shareholders.
This week, Ocado shareholders approved a £15m maximum pay policy for the online supermarket’s boss Tim Steiner.
However, more than 19 percent of votes cast at the meeting opposed the increase.
Last week, the London Stock Exchange Group (LSEG) was given the green light to double chief executive David Schwimmer’s top package, from £6.25m to £13m.
About 11 percent of shareholders voted to block the rise amid concerns about the health of the London stock market.
And AstraZeneca chief executive Pascal Soriot will be paid £18.7m this year, despite 36 per cent of shareholders voting against a £1.8m rise.
Meanwhile, Tesco plans to hand boss Ken Murphy a record £10m in 2024, with investors set to vote on the proposal later this year.
Julia Hoggett, who heads LSEG’s securities division, has said lower executive salaries make it harder for UK companies to attract top talent compared to US competitors.
In an update to investors ahead of the meeting, Smith & Nephew said revenue in the first quarter was £1.1 million, up from £1.08 million a year earlier.
The growth was driven by its orthopedics, sports medicine and ear, nose and throat businesses, which offset slowing sales in its advanced wound treatment division. Full-year growth is expected to be between 5 and 6 percent.