Pay revolt set to engulf Government contractor Kier as perks are laid bare – including paying for ex-boss’s broadband
Schools and roads construction giant Kier has admitted to covering its former chief executive’s home broadband bill in a pay report that is set to trigger a shareholder revolt this week.
Influential shareholder advisory groups ISS and Glass Lewis have both told investors to vote against approving the executive payments at the key Government contractor’s annual general meeting on Friday.
Kier – which has seen its market value fall from around £1 billion to less than £200 million in a year – paid its board a total of £2.1 million in the year to June, when the firm reported losses of £245 million.
Influential shareholder advisory groups ISS and Glass Lewis have both told investors to vote against approving the executive payments (Stock image)
The total is down from £5.5 million the year before because Kier did not pay any bonuses in 2018-19.
But Kier’s annual report reveals that Haydn Mursell – ousted as chief executive in January after a bungled share sale – still took home £423,000, down from £1.5 million the previous year.
The firm admitted that his package included the cost of a broadband subscription for his personal residence. The cost made up part of £7,000 paid to Mursell in ‘taxable benefits’, which would also include private health insurance and company car use.
Kier was only forced to disclose the broadband perk because it continued to pay it to the end of June – five months after Mursell had left the firm. Previously the broadband payment was not disclosed because it was considered a ‘business expense’.
ISS’s concerns ahead of the AGM centre on the long-term bonuses available to Kier’s new top team.
In a report to investors, ISS has recommended a vote against the pay policy because Mursell’s successor, Andrew Davies, could be paid a long-term bonus of up to 175 per cent of his salary – which could equal more than £1 million.
Glass Lewis has come out against Kier’s executive pay because its new chief financial officer, Simon Kesterton, has a salary of £475,000, which is 18 per cent higher than that of his predecessor Bev Dew.
Glass Lewis said the firm had not provided a ‘compelling rationale’ for this increase.
The potential AGM showdown comes at a tough time for Kier, which is one of the UK’s largest builders of roads, railways and schools. It is currently one of London’s most shorted stocks, meaning investors are expecting its share price to fall further in the future.
And it was reported last week that Kier’s lenders are seeking to sell down their interests in the firm’s debt, indicating further concern.
Kier declined to comment last night. In its annual report, the company said the pay of Davies and Kesterton was ‘set at a level which is designed to promote an immediate alignment of interests with shareholders’.