8:26 am, May 30, 2022
Dealer group Pendragon could be set for its third shareholder rebellion in as many years after a leading adviser slammed plans to give bosses their full bonuses for 2022.
The thorny issue has reared its head again after proxy adviser Glass Lewis described the decision as ‘inappropriate’.
The firm, which advises shareholders, also said the rewards were ‘incompatible’ with the level of taxpayers’ money that went into keeping Pendragon afloat at the height of Covid-19.
It has now written to shareholders, calling against the re-election of non-executive director Mike Wright, who chairs Pendragon’s remuneration committee.
The Times reports it has also advised them to reject the dealer group’s pay report at next month’s AGM.
Glass Lewis said: ‘We do not believe such a significant bonus payout in terms of maximum opportunity is reconcilable with the significant utilisation of government support.’
The firm also criticised Pendragon’s ‘insufficient response’ to shareholder dissent at previous meetings and said they should ‘escalate their concerns’ by opposing Wright’s re-election.
This could be the third year in a row that the company’s pay report is met with significant opposition, following a high-profile revolt led by Hedin Group last year.
The investment group is Pendragon’s largest shareholder, with a 27.1 per cent stake, and has confirmed it will be voted against the latest pay rises.
In a strongly-worded statement, Anders Hedin, the owner of Hedin Group, described the situation as ‘unacceptable’
He also joined calls for Mike Wright not to be reappointed.
He said: ‘Chief executive, William Berman, was paid an astonishing £3.4m in total in 2021, which is both excessive and unwarranted.
‘Pendragon has received Government support over the last two years and its improvement in profitability has been far from unique, as the sector has experienced abnormal levels of profitability due to supply shortages.
‘We voted against the pay excess at Pendragon last year. Similarly, we will vote against the 2021 Remuneration Report, which could result in Mr. Berman being paid £2.2m.
‘The board has significant powers of discretion over remuneration and should exercise them to remedy this unacceptable situation.
‘Opposition from shareholders at this year’s AGM will be the third year in row significant numbers of shareholders have opposed Pendragon remuneration reports.
‘We no longer believe Mike Wright is fit to chair the Remuneration Committee and will also be voting against his reappointment.
‘The board of Pendragon has to stop ignoring the concerns of shareholders and establish a remuneration policy that is appropriate and rewards genuine executive success.’
In May 2021, boss Bill Berman survived a shareholder rebellion over a pay deal that saw him pocket more than £3.2m during the pandemic. The deal included an £825,000 bonus.
Finance chief Mark Willis and chief operating officer Martin Casha also received bumper bonuses of £461,000 and £454,000 respectively. The remuneration report was eventually approved by 57.6 per cent.
A year prior to that, 41 per cent of shareholders voted against a pay deal that saw Berman earn £2.2m.
Berman has since been replaced as non-executive chairman but remains in place as CEO of the group.
Since the controversy, Pendragon – which owns the Evans Halshaw and Stratstone brands – posted record-breaking profits of £83m in 2021.
The group has also made a strong start to 2022 and made a pre-tax profit of £18.7m in Q1.
It hasn’t paid back any of the near-£65m in taxpayers’ money it claimed during the pandemic, though.
A spokesman for the company said: ‘Pendragon delivered a strong performance last year with new and used car sales ahead of our sector benchmarks, resulting in record underlying profits.
‘The group also continued to make positive progress against its strategy despite operational challenges caused by the pandemic, including lockdowns in the early part of the year.
‘The remuneration committee believes the rewards for the executive team and the wider operational management team are commensurate with this performance and in line with the wider sector, and the remuneration policy supports the longer-term success of the business for all stakeholders.’
Pictured: Bill Berman, CEO of Pendragon
