Unilever, the FTSE-100 consumer goods giant behind Marmite and Lynx, is facing an investor backlash over its new chief executive’s multimillion pound pay package.
Sky News has learnt that ISS, a leading proxy adviser, has recommended that shareholders vote against Unilever’s remuneration report at its annual meeting later this month.
Sources familiar with ISS’s report on Unilever’s AGM resolutions say the agency objects to the discount of just €50,000 that the Ben & Jerry’s owner has applied to the base salary of Fernando Fernandez, compared to Hein Schumacher, his predecessor.
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Unilever surprised the City in February when it announced that Mr Schumacher would leave after just two years in the job, amid frustration in its boardroom about the pace of growth.
In an accompanying statement, Unilever said Mr Fernandez – previously the chief financial officer – would be paid a basic salary of €1.8m, modestly lower than Mr Schumacher’s €1.85m.
In a summary of ISS’s report, the proxy adviser said Mr Fernandez’s “base salary as new CEO is significant and represents a small discount to the former CEO Hein Schumacher’s base salary”.
“The company does not appear to have sufficiently accounted previously raised shareholder concerns on the CEO role’s pay arrangement when setting Mr Fernandez’s remuneration.”
Unilever had also “disapplied time pro-rating” in respect of former executive directors’ long-term share awards, meaning that the company could have legitimately decided to award them smaller amounts of stock than it did.
On Wednesday afternoon, shares in Unilever were trading at around £44.79, giving the maker of Magnum ice cream and Persim washing-up liquid a valuation of close to £115bn.
Unilever did not respond to a request for comment.
