Bridgepoint, a newly listed private equity firm, has been accused of paying independent directors £ 3.25 million worth of “Golden Hello”, and asset managers have “very irregular” and “unnecessary” payments. He warned that it caused a “conflict of interest”.
The issue of salaries for directors is that of the company. strong Debuted on the London Stock Exchange.Its share price rose 29% on Wednesday’s initial public offering, investors buoyancy Private equity industry outlook.
In a document released as part of the IPO, the company revealed that Marks and Spencer chairman and former MP Archie Norman received a £ 1.75 million sign-on fee and was invested in Bridgepoint shares after tax. He is also paid £ 200,000 a year for that role.
The other three independent directors, Carolyn McCall, Angeles Garcia Poveda and Tim Score, have been awarded £ 500,000 Golden Hello and receive £ 75,000 to £ 95,000 annually for their role.
A corporate governance expert at an asset management company that acquired Bridgepoint’s IPO said the fundhouse plans to raise the issue of director’s Golden Hello to the board.
“The company’s IPO rode a wave of excitement for private equity, and valuations served as a good entry point for investors. [I am] It was not surprising that the price rose on the first day of trading. ” “But that doesn’t justify a very irregular arrangement for non-executives.”
He added that strong oversight from completely independent directors is important for the protection of minority shareholders. In particular, the company’s decision to appoint Chief Executive Officer William Jackson as Executive Committee Chairman and the company.
“Compensation arrangements offered to non-executive officers can create unnecessary conflicts of interest and undermine the effectiveness of the way the board fulfills its supervisory responsibilities,” added a governance expert.
Another large asset manager said he had questions about whether payments would undermine the independence of directors.
He added that it was a further concern when the company required directors to buy shares with these payments. “It’s more controversial. It can compromise your ability to monitor properly,” he said.
Another governance expert at a UK fundhouse has expressed concern about the size of payments. He acknowledged the general debate about whether directors should be paid better while working for fewer companies, and said bridgepoint payments were overpaid.
Neville White, head of responsible investment policy for EdenTree Investment Management, a UK asset management company that did not invest in an IPO, said payments were “very unconventional and, in our view, violate best practices.” Said.
He added that the UK Corporate Governance Code, which applies to listed companies, “part-time officers should be independent at the time of appointment, and any kind of paid incentives undermine their independence.”
“I think it’s unheard of to pay a’signature fee’for a part-time appointment,” he said.
Paul Lee, director of stewardship at investment consultancy Redington, said the payments “look generous.”
He added: [the independent directors] You’ll climb steeper slopes to evaluate management salaries and convince shareholders that they’re completely robust to holding management to explain their performance. “
“We are pleased to welcome such a high-quality board of directors to bring the wealth of experience and truly diverse skills of FTSE-listed companies to the next stage of Bridgepoint.” Stated.
Bridgepoint under fire for big ‘golden hellos’ paid to directors Source link Bridgepoint under fire for big ‘golden hellos’ paid to directors