William Hill chief’s pay deal survives shareholder revolt by a nose

After 49.8% voted against director pay packages via proxy votes, the remuneration report was then passed on a show on hands

William Hill’s controversial pay deal for chief executive Ralph Topping only scraped through the shareholder vote at its annual meeting on Tuesday in one of the largest rebellions to date.

After 49.8% voted against director pay packages via proxy votes, the remuneration report was then passed on a show on hands as the uprising against boardroom excess gathered pace.

Topping had received a £1.2m retention bonus and an 8.3% pay rise. The management said they would stand by that payment, even after the stinging rebuke from shareholders. “I am a man of my word and I will not renege on that deal,” chairman Gareth Davis said.

At the annual meeting, one angry shareholder said: “CEO’s are dining in the last chance saloon trying to take as much as they can as soon as possible.”

The Association of British Insurers, whose members control around 15% of the stock market, had issued an “amber top” warning on the bookmaker’s remuneration report. Pensions and Investment Research Consultants (Pirc) has advised shareholders to abstain on the remuneration vote.

Investors are angry at the £1.2m retention bonus in particular because it is not linked to performance.

The company insists the reward is to maintain stability and over the weekend its chairman called for calm in the “shareholder spring” in advance of the meeting. “We do not fall into the category of reward for failure,” Davis said, pointing out that William Hill’s share price has risen almost 30% in the past year and its dividend was up 16% in 2011.

“Ralph has done a remarkable job,” Davis said. “He was appointed four years ago in very different circumstances and he has turned round the company’s performance.

“I understand the whole subject of executive remuneration is a hot topic. I just hope that as we get through the reporting season the debate becomes a little more balanced.”

The company faced a similar rebellion a year ago, when 38% of shareholders failed to support the remuneration report at the 2011 AGM, which saw Topping’s package jump 56% to £1.65m in pay, benefits and bonuses.

The bookmaker increased revenue by 6% to £1.1bn last year, thanks to strong growth in its internet business. Pre-tax profit dropped 3% to £187.4m, partly due to a £47m write-off over the restructuring of its telephone business.

Protest votes at AGMs have become more common this year, with shareholders registering their disappointment at Barclays, Man Group and Xstrata.

The investor activism has also seen the resignations of the chief executives of AstraZeneca and Trinity Mirror, David Brennan and Sly Bailey respectively, along with Moss.

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