CPL boss Anne Heraty’s 25% pay rise questioned ahead of agm
Salary hike to €575,000 ‘does not give a specific explanation regarding the increase’
CPL founder and chief executive Anne Heraty said in the annual report that the current financial year has started well for the company.
A leading shareholder advisory firm has raised questions about recruitment company CPL Resources awarding a pay increase of more than a 25 per cent to its chief executive, Anne Heraty, without providing a sufficient justification for investors in the recruitment company’s annual report.
Institutional Shareholder Services (ISS), a proxy advisory firm that makes recommendations to major investment firms on how to vote at shareholder meetings of public limited companies, said CPL’s recently-published annual report, which disclosed a hike in Ms Heraty’s salary to €575,000 for the year through June, “does not give a specific explanation regarding the increase”.
“In line with recommended market practice, companies are expected to provide an explanation in the annual report for shareholders to fully understand their rationale in granting these salary increases to executive directors,” Institutional Shareholder Services said in the report ahead of CPL’s agm on October 21st.
The salary increase is believed to comprise a 2 per cent pay rise, with the rest linked to performance bonuses.
Ms Heraty and her husband Paul Carroll, CPL’s business development director, own about 35 per cent of the group that the businesswoman co-founded three decades ago.
With the growing influence of proxy advisory firms like ISS and Glass Lewis, institutional shareholders have become more active in relation to “say on pay” resolutions at agms in recent years internationally. However, as CPL is listed on London’s junior market, known as AIM, it does not have to put its remuneration before shareholders for a vote.
Glass Lewis raised no issues with remuneration in its pre-agm report on CPL.
CPL reported on September 10th that its pretax profit soared by 33 per cent to €25 million, outstripping an 8 per cent rise in revenues to €565 million, as it benefitted from persistent skills shortages in some of the key sectors in which it operates, such as technology and pharmaceuticals.
Ms Heraty said in the annual report that the current financial year has started well for the company.
“We are mindful of the potential macro-economic challenges driven by Brexit and the potential for changes to levels of investment and employment within our client base,” said the chief executive. “Should conditions change, we are prepared, we have flexibility in our cost base and we can moderate our growth plans.”
Meanwhile, ISS has moved in recent days to pull a previous recommendation that shareholders vote against the re-election of recruiter’s non-executive director Breffni Byrne on the basis of “potential independence issues” and as he currently sits on the audit and remuneration committees, the composition of which does not adhere to UK best-practice recommendations for a company of CPL’s size.
However, the annual report said that Mr Byrne, who joined the board in 2007, will step down during the current financial year.
“During engagement with the company post-publication of the report, it was emphasised that the continuity provided by Breffni Byrne on the board for an additional year, whilst an additional non-executive director is yet to be appointed, is in line with an orderly and staggered succession of the non-executive cohort of the board,” said ISS.
“Taking this into consideration, the re-election of Breffni Byrne to the board warrants qualified shareholder support at this time.”