Kingspan’s top brass trying to insulate themselves from reality

The company would be foolhardy to ignore the underlying level of shareholders’ discontent seen at its agm

When it comes to executive remuneration, shareholders of Irish public companies are becoming increasingly bolshie.

More than 20 per cent of Glanbia’s investors recently expressed their unhappiness about executive pay at its annual meeting. Last year Irish Continental Group found itself in the firing line, and there continues to be opposition to pay increases for executives at our bailed out banks.

Cavan-based insulation group Kingspan became the latest listed company here to see a significant number of investors vote against its remuneration report, following advice of shareholder advisory groups.

At its annual general meeting in Dublin on Friday almost a quarter of shareholders opposed its remuneration policy, which could allow incoming executive directors receive a pension of up to 25 per cent of their basic salary.


The interesting thing wasn't so much that shareholders opposed this policy but the way in which the company's chief executive, Gene Murtagh, reacted.

After the meeting he told journalists that the company would take the concerns “into account”, not promising any particular changes.

At a time when shareholders are more discerning about issues such as pay this isn't necessarily the best approach – especially at a company where the chairman, founder Eugene Murtagh, Gene's father, watched as 16.3 per cent of shareholders voted against his re-election. Some 10.4 per cent voted against Gene Murtagh's re-election as CEO.

Just two members of the board of 11 received approval of more than 90 per cent of shareholders.

In isolation those figures might not be a disaster for the company. However, it signals an underlying level of discontent among shareholders, which it would be foolhardy to ignore.

It might also be a signal of a longer-term trend in relation to pay at public companies, not just in Ireland. Nearly 30 per cent of shareholders voted this week against the remuneration report of British property group Hammerson, which part owns the Dundrum Town Centre and has other Irish assets.

If Kingspan’s top brass want to insulate themselves from this reality the board will have to do more than pay lip service to the task of reforming executive remuneration.