ShareSoc is delighted by today’s news that BG Group has decided to withdraw the conditional share award that was proposed for new CEO Helge Lund. This is a good illustration of active shareholders being able to influence corporate policy and restrain abuses.
However, today’s announcement, including acceptance by Mr Lund of the revised terms, clearly demonstrates that the original proposal was excessive and unwarranted. It is obvious that insufficient consultation with shareholders had been conducted before the proposed package was announced, as shareholder time and money was wasted in calling an unnecessary general meeting. We therefore call on Remuneration Committee Chairman Sir John Hood to step down, in the light of these failures, and exhort BG Group’s Nomination Committee to select an alternative candidate who will act in the company and public interest.
This whole debacle further illustrates the flaws in the current UK Corporate Governance Code, where committees of directors determine appointments and remuneration of other directors. ShareSoc has long campaigned for shareholder committees to replace these director committees, to improve the governance of quoted British companies. We call on the Government and the Financial Reporting Council to review current corporate governance practice. Details of our proposals can be found here: http://www.sharesoc.org/Shareholder%20Committees.pdf