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Car dealer Pendragon Motors heading for major wage revolt after job cuts | Business news

Pendragon, one of the UK’s largest auto dealers, is facing massive backlash from shareholders after paying its chairman a six-figure bonus despite cutting 1,800 jobs and spending millions of pounds in taxpayers’ money on vacation workers.

Sky News has learned that both the company and some of its directors are at risk of being hit over boardroom pay at next week’s general meeting.

Sources said Mike Wright, the non-executive director who chairs the Compensation Committee, was at particular risk of being elected from the board.

Shareholder anger was compounded by Pendragon’s decision last July to reduce about a quarter of its workforce while they’re taking government funding to navigate them through the pandemic.

Bill Berman, the chief executive officer and interim chairman, is also facing a major vote against his re-election after receiving a £ 413,000 deferred bonus.

A source close to Pendragon insisted the company “acted swiftly and decisively to protect its employees,” saying its performance bounced back sharply in the second half of the year.

The prospect of a major revolt comes a year after more than 40% of shareholders opposed Pendragon’s compensation policy and fell just short of the threshold above which the company would have been forced back to the drawing board.

Institutional Shareholder Services (ISS), an influential proxy advisor, said in a report to clients that, despite last year’s protest vote, the company “does not appear to have addressed the underlying concerns in any meaningful way.”

The voting advisory service operated by the Investment Association has been the most likely to educate shareholders about Pendragon, stating that its bonus decisions appeared questionable.

“The shareholders must satisfy themselves that this bonus payment for the executive directors corresponds to the experience of employees, shareholders and other stakeholders,” said the IAIS service IVIS.

In a blog post published on Friday, Legal & General Investment Management said it planned to vote against several resolutions, including the Compensation Report.

“The Compensation Committee approved a bonus payment to executives that we do not consider a fair reflection of the stakeholders’ experiences,” it said.

“The committee reset the bonus calculation and set a performance target that only evaluates performance for the second half of the fiscal year, which was fully met.”

The fund manager said he would vote against both Mr Berman and Mr Wright, increasing the possibility of the two fighting for re-election.

LGIM added that it would also oppose KPMG’s reappointment as Pendragon’s auditor due to his 24-year tenure in that role.

Pendragon’s showdown with shareholders will be the most recent focal point involving a large UK company at a time of heightened sensitivity to boardroom pay.

This week, Cineworld saw a major revolt over incentive arrangements for its top executives, while AstraZeneca, BAE Systems and Rio Tinto have all been hit by significant voices of protest in recent weeks.

Pendragon declined to comment.


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