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Equipment rental company Ashtead has defended a planned pay deal of up to about $14 million for chief executive Brendan Horgan, despite advisory firms urging shareholders to vote against such “excessive” remuneration.
Ashtead, which is listed on the FTSE 100 and operates as Sunbelt Rentals, is seeking to win shareholder support at its annual meeting next month for a three-year pay policy that would potentially double the total amount Horgan could earn this financial year.
But the group’s proposals have been deemed excessive by proxy advisers ISS and Glass Lewis, who are urging shareholders to vote against the policy. Mr Horgan, a US resident, received a total of $7.26 million last year.
Ashtead said its “success depends on continuing to attract and retain high-caliber talent, including at the executive level, who are residents of the United States.”
He added that the policy helped align “remuneration with relevant competitive market norms” and that the increase reflected Horgan’s “experience and strong track record over the past five years.”
The potential pay rise comes as Ashtead, 90 percent of whose business is concentrated in the United States, is considering moving its listing from London to New York. In June, it responded to reports of such a possible move by saying it “reviews its capital structure regularly, including its domicile.”
Executive pay has moved up the corporate agenda as the London Stock Exchange grapples with a number of companies opting to list on US stock exchanges. Julia Hoggett, head of the London Stock Exchange, said last year that executives They should pay more to retain talent and help prevent British companies from moving their listings abroad.
A number of companies, including plumbing firm Ferguson and gambling company Flutter, have… They recently moved their main listings to the US.while other British companies, such as chipmaker Arm, have opted to go public in New York in search of a higher valuation.
Under Ashtead’s pay proposals, Horgan could receive up to 700 percent of his $1.2 million base salary, based on his performance, and restricted stock of up to 150 percent, which vest if certain conditions are met. The story was first published in the Times.
ISS said the planned changes “represent a significant departure from UK market practice,” noting that “while the company’s justification for some level of increases for its US-based executives is acknowledged in part, the scope of the proposed changes is considered excessive.”
Glass Lewis said it was “concerned about the opportunity available to the CEO under the proposed long-term incentive plan.” It added that its “concerns regarding the significant quantitative increase without compelling justification for its necessity” mean it “cannot recommend that shareholders support this proposal.”
Ashtead said: “The remuneration committee has undertaken a thorough review of the remuneration policy to ensure that Ashtead’s pay offering at all levels remains aligned with the group’s pay philosophy and is credible in the markets in which it operates.”