Investors in Irish Continental Group (ICG), owner of Irish Ferries, have been urged by a leading advisory firm to reject chief executive Eamonn Rothwell’s bonus structure and a company plan to allow it hold virtual annual general meetings (AGMs) of shareholders in future.
The recommendation by Institutional Shareholder Services (ISS) that investors vote against ICG’s remuneration plan is in line with its stance on a number of previous occasions and centres on the same argument: a lack of clarity from the company over the targets on which the chief executive’s bonus is based.
Mr Rothwell (68), who has led Irish Continental for the past 32 years, was paid a bonus by way of €1.47 million worth of restricted shares last year, according to ICG’s annual report. That equated to 99.7 per cent of his maximum opportunity under the company’s remuneration arrangements.
His total package came to €4.47 million, up from €3.15 million for 2023.
Commenting on the bonus in the annual report, ICG said: “When financial performance is strong and shareholder experience is healthy, payouts will accrue. When the converse is the case, performance-related pay will be correspondingly reduced to a minor or nil amount, which runs in contrast to more complex schemes commonplace at listed companies.”
However, ISS said shareholders are, nonetheless, limited in their ability to assess bonus outcome, based on the disclosure given.
“This concern is exacerbated by the fact that the CEO has received near maximum bonuses in the past two years,” it said.
ISS has also called on investors to vote against an ICG board plan to amend its articles of association to potentially allow for virtual-only shareholder meetings to be held in future.
ICG said it does not currently intend to hold any virtual-only meetings but wanted to “retain the flexibility to do so in appropriate or exceptional circumstances”. Irish company law was amended last year to pave the way for businesses and societies to hold virtual or hybrid AGMs.
“While there is recognition of the potential benefits of enabling participation at shareholder meetings via electronic means, investors raised concerns about moves to completely eliminate physical shareholder meetings as normal practice, arguing that virtual meetings may hinder meaningful exchanges between management and shareholders and enable management to avoid uncomfortable questions,” ISS said.
“The concern remains that the virtual format may be used to stifle challenge from shareholders in a live setting.”
While many companies in North America have gone down the road of virtual-only meetings in the wake of the Covid-19 pandemic, it is more unusual on this side of the Atlantic.
In the UK, only 3 per cent of FTSE 350 companies that have issued their AGM notices so far this year have opted for virtual AGMs only. These include Bakkavor, the convenience foods group currently under a takeover offer from Dublin-based Greencore, and shipping services company Clarkson.
