Alliance Trust chief executive Katherine Garrett-Cox has come under fire for her pay as shareholders were urged to vote against her remuneration package at the trust’s upcoming annual general meeting.
The AGM has been billed a showdown between Alliance Trust and its largest shareholder, Elliott Advisors, over the nomination of three non-executive directors to the board – but it could also turn into a referendum on Ms Garrett-Cox’s salary.
The Pensions & Investment Research Consultants (PIRC), a corporate governance and shareholder advisory consultancy, last week advised shareholders to vote against Alliance Trust’s remuneration report at the upcoming AGM, citing the high salary paid out to Ms Garrett-Cox as its reason.
Ms Garrett-Cox was paid a base salary of £450,000 in 2014, but after bonuses and other payouts her total salary was £1.34m.
The only other large investment trust with a chief executive, Witan, paid out a base salary of £268,000 and a total salary of £544,514 to Andrew Bell in 2014.
And when compared to listed asset management firms, Ms Garrett-Cox’s base salary was higher than those of chief executives at firms such as Jupiter, Henderson and Polar Capital, in spite of those companies managing significantly more assets.
PIRC said its main objection to Ms Garrett-Cox’s remuneration was that the chief executive’s overall pay was nearly 300 per cent of her base salary, due to bonuses and share awards – significantly more than the limit of 200 per cent it considered “best practice”.
At the investment trust’s last AGM, 10.64 per cent of shareholders voted against the previous year’s remuneration policy, with 1.28 per cent abstaining.
Corporate governance experts Institutional Shareholder Services (ISS), said: “Management compensation seems elevated versus peers and FTSE 250 companies.”
In a statement, Alliance Trust denied Ms Garrett-Cox’s pay was excessive and said: “Her pay fairly reflects the scope and complexity of the role and appropriately incentivises her to generate strong performance for all shareholders.”
It said PIRC had set its own “arbitrary 200 per cent limit” and that the formula for Ms Garrett-Cox’s remuneration made use of independently-produced benchmarking information.
The company also said Ms Garrett-Cox is responsible for the performance of Alliance Trust Investments, which has £1.9bn of assets under management, and Alliance Trust Savings, the £7.3bn platform.
