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Land Securities Avoids Shareholder Pay Revolt

(c) Sky News 2012

Land Securities, Britain's biggest commercial property company, will this week avoid becoming the latest victim of the shareholder revolution which has swept Britain's boardrooms in recent months.

I have learned that Land Securities' chairman, Alison Carnwath, and the company's remuneration report have both received overwhelming backing from investors who have already voted ahead of this Thursday's annual general meeting.

"The votes for both the chairman and the pay report are in the high 90 per cents in favour," a person close to the property group, which owns the Lakeside shopping centre and the Piccadilly Lights at Piccadilly Circus in London, tells me.

I should point out that the final votes on Land Securities' pay policies are not yet certain, with a deadline for proxy votes of Tuesday.

Assuming that the expected outcome does materialise, however, it would be of more than passing interest.

The clue as to why lies in the identity of the person who runs Land Securities' boardroom.

Ms Carnwath has been among the most prominent figures of this year's 'shareholder spring', holding the remuneration committee chairmanships at Barclays (LSE: BARC.L - news) and Man Group (LSE: EMG.L - news) , the hedge fund.

At Barclays' annual meeting in April, a not-insignificant vote was registered against Ms Carnwath following shareholder anger over the pay package of the bank’s then chief executive, Bob Diamond.

That was followed by a similar protest at Man (Other OTC: MAGOF.PK - news) 's annual meeting.

What was not known at the time of Barclays' annual meeting was that Ms Carnwath had in fact strenuously opposed the £2.7m annual bonus awarded to Mr Diamond, and that she was overruled by a collective board decision.

When that fact emerged, the response of some shareholders was that she ought to have employed the ultimate decision of any dissatisfied non-executive director and resign.

Those same shareholders are now grateful that she didn't quit.

That is because Ms Carnwath, as Sky News revealed nearly a fortnight ago, decided to fight to prevent Mr Diamond receiving a lavish pay-off following Barclays' £290m fine for its attempts to manipulate the rate of the interbank borrowing rate Libor.

Her efforts were successful, with Mr Diamond waiving his right to nearly £20m in deferred share awards.

Since then, investors have been queuing up to praise her.

The other key factor in Land Securities' likely avoidance of a shareholder revolt this week is the changes it has made to executives' contracts.

The company's annual report disclosed that it was introducing clawback across the discretionary pay awards for which senior executives are eligible, making it one of the significant applicants of reducing reward for failure outside the banking sector.

This year has seen the highest-ever number of boardroom pay reports suffer defeats, with companies including Aviva (LSE: AV.L - news) and WPP Group on the receiving end of shareholder ire amid perceptions that company bosses are enjoying excessive rewards.

Land Securities declined to comment.