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Shire faces anger over chief executive's 25% salary increase

Published 28/04/2016

Shareholders protested about the Shire chief's salary increase
Shareholders protested about the Shire chief's salary increase

London-listed pharmaceuticals giant Shire has become the latest victim of shareholder anger over pay, with 49% of investors voting against chief executive Flemming Ornskov's 25% salary increase.

Dr Ornskov's pay was ramped up to 1.7 million dollars (£1.2 million) and his bonus increased last July in an attempt to ensure that he was not poached by a rival. However, the decision was not put to shareholders at the time because Shire was in the midst of acquiring rival Baxalta, which it later agreed to buy for 32 billion dollars (£21 billion).

Fund manager Hermes advised shareholders to vote against the Dublin-based company's pay report at its annual general meeting, held on Thursday.

Dr Hans-Christoph Hirt, co-head of Hermes equity ownership, said: "We do not support the increase in salary of 25% for the CEO, particularly given that his overall bonus potential is more than 10 times his basic salary and his total remuneration was over 21 million dollars (£14 million) last year.

"We believe that an incremental approach to salary rises is more appropriate and should reflect shareholder value creation over the longer term."

Royal London Asset Management was also among the shareholders to vote against the pay hike.

The result comes amid growing shareholder unease over executive pay.

Earlier this month, shareholders in oil giant BP voted to reject its remuneration report for the last year, which included a pay deal of 19.6 million dollars (£13.8 million) for chief executive Bob Dudley.

Mining giant Anglo American has also faced investor protests after 42% of shareholders voted against chief executive Mark Cutifani's £3.4 million pay package for 2015.

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