Glanbia has pledged to engage shareholders on its remuneration policy after a significant rump of investors voted against plans to give chief executive Siobhán Talbot a 22 per cent pay increase.
At the food group’s annual general meeting in Kilkenny, more than 20 per cent of shareholders opposed the move, which will see Ms Talbot’s basic salary rise to €1.05 million, bringing her total compensation when bonuses and pension entitlements are included to €2.34 million.
The plan also provides the company’s finance director, Mark Garvey, with a 15 per cent pay rise, bringing his basic salary to €581,000, and makes it easier for both to receive bonus stock awards.
In recent years resolutions on executive pay have received almost unanimous support from shareholders.
However, the current pay plan has angered Glanbia suppliers who have been hit by a reversal in milk prices globally.
One farmer told the board he was receiving less for his milk now from the company than in 1995 despite the pick-up in global dairy demand, particularly in Asia, and the company’s €2 billion plus turnover.
Shareholder advisory firms Glass Lewis and Institutional Shareholder Services (ISS) had also expressed reservations about the level of executive compensation in the current economic climate and with the potential threats to global trade, advising shareholders to oppose it.
While the resolution was passed, Glanbia company secretary Michael Horan said the level of dissent meant the company would engage with shareholders on the matter and report back later in the year.
On the whole, however, investors praised the board for the company’s strong financial performance last year, which saw revenue rise 5 per cent to €2.4 billion.
Prior to the agm, the company also released a trading update, showing revenues were up 8.4 per cent on a constant currency basis in the first quarter, underpinned by growth across its key businesses.
Within this, Glanbia’s performance nutrition business reported a 4.9 per cent rise in revenues, which was mainly due to the recent SlimFast acquisition. The company paid €313 million last year for the weight-loss brand, its biggest ever acquisition.
Ms Talbot said the previously loss-making brand had already turned a corner and was generating a profit for Glanbia. She said SlimFast complemented its existing performance nutrition business and tapped into a global trend towards weight-loss products.
One shareholder asked about possible tensions between the company and Kerrygold maker Ornua arising from its decision to launch rival dairy brand, Truly Grass Fed, which may ultimately eat into Kerrygold sales.
But chairman Martin Keane played down the significance of Glanbia’s move, insisting Glanbia, as a Ornua shareholder, would continue to support the Kerrygold brand.
The Kilkenny company trialled a Truly Grass Fed cheese product in the US last year just as Ornua was trying to fend off a lawsuit over its grass-fed claims for Kerrygold.
Tensions around the issue caused the cancellation of Ornua’s monthly meeting of directors last November. In its trading update, Glanbia reiterated its full-year guidance of 5 per cent to 8 per cent growth.