Shareholder spring continues as Pendragon's pay report is voted down

Two-thirds of investors reject car dealer's bonus proposals
• Three pay reports now defeated in 2012; several barely passed
• Trinity Mirror pay report only just scrapes through vote
• Discontent also expected at Centrica's meeting on Friday



Car dealer Pendragon is the third company to have its pay policy rejected by shareholders this spring. Photograph: David Cheskin/PA
The shareholder spring continued to blossom on Thursday when the remuneration report of car dealership Pendragon was voted down – the third to be rejected by shareholders this year – and media group Trinity Mirror scraped through a protest vote over pay.

In a sign that there is no let-up in the current wave of shareholder activism, other companies endured revolts on Thursday, including media group Mecom and gaming company Sportech.

The focus will now turn to Centrica, the owner of British Gas, which is preparing for a rebellion at its annual meeting on Friday, and then materials science company Cookson and online gambling group 888, which hold annual meetings next week.

Advisory body Pirc has recommended voting against every member of the Cookson board and the Association of British Insurers (ABI), whose members represent a significant group of institutional investors, has issued a "red-top" alert – which warns members of serious concerns – at Cookson and 888.

Pendragon had also been the subject of an ABI alert to investors, while Pirc had recommended voting against the pay deals. That helped trigger the hefty defeat of the remuneration report: 67% of Pendragon investors voted against, causing the firm to withdraw its attempts to increase the potential bonus for directors from 100% of their salaries to 150%.

At Trinity Mirror – where chief executive Sly Bailey had already become a victim of the shareholder spring after resigning last week – 46% of investors voted against the remuneration report while the level of protest rose to 54% if deliberate abstentions were included.

Almost a quarter of shareholders voted against the publisher's long-term incentive plan, and Jane Lighting, the former chief executive of Channel 5, who heads the remuneration committee, failed to win the backing of one in five of shareholders. Just under 15% of investors failed to back Bailey, whose £14m pay deals over 10 years have infuriated investors amid a slump in the company's market value from more than £1bn to £80m. The backlash came despite her promise to leave by the end of the year.

Pendragon's remuneration report is the third to be voted down this year. The small gold-exploration company Central Rand Gold suffered a 75% revolt against its pay policy last month while insurance company Aviva had its report voted down last week, sparking the resignation of chief executive Andrew Moss on Tuesday.

Pendragon's chairman Mike Davies, who endured an investor rebellion against his re-election to the board when 25% of shareholders voted against him, told the annual meeting there would now be consultation over pay.

"I would like, on behalf of the board, to take this opportunity to reassure all shareholders that we have taken their objections about short-term and long-term incentive plans seriously," Davies said. He promised a "full review of all remuneration policies".

Pirc has warned that Centrica's new executive pay scheme means "potentially excessive amounts could be awarded" while the ABI has also flagged up the deals for shareholders attending the annual meeting at the Queen Elizabeth II conference centre in London on Friday.

Centrica has been criticised for allowing its chief executive, Sam Laidlaw, to take home almost £4m in 2011 despite flat company earnings. Greenpeace has called for Laidlaw to hand back his bonus and other anti-nuclear protestors said they would demonstrate outside Centrica's meeting over its plans to build a new generation of reactors.

The company argues the altered remuneration policy will benefit investors as it introduces a clawback mechanism for taking back deferred bonuses under certain circumstances. The new scheme also introduces a wider list of criteria – not just financial results – that must be met for senior executives to win their bonuses.

Chairman Sir Roger Carr is expected to stress that the headline figure for Laidlaw's remuneration package has been boosted by a series of payouts from various long-term incentive schemes. He will also point out that the chief executive's basic pay of £1.2m has been frozen for 2012 – as has the £681,000 salary of British Gas managing director Phil Bentley.

It is expected that up to 15% of shareholders will vote against the pay plan. Despite a clamour from protesters – and some parts of the City – for Centrica to abandon its plans to build new nuclear plants in cooperation with EDF of France, there is likely to be no pullout announced on Friday.

Lawrence Carter of Greenpeace said: "Laidlaw should hand back his bonus. And it's high time for him to bring energy bills under control by dropping increased imports of expensive and polluting gas and instead backing clean, renewable energy and energy efficiency."