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M&C Saatchi dealt bloody nose over executive pay

Ben Woods
·2-min read
Moray MacLennan, the incoming boss of M&C Saatchi
Moray MacLennan, the incoming boss of M&C Saatchi

M&C Saatchi investors have revolted over executive pay in a fresh blow to the scandal-hit advertising group. 

Almost 21pc of shareholders voted against the company's pay report following concerns about a potential £1.9m bonus for finance boss Mickey Kalifa which has no targets attached.

Shareholder advisory group ISS called for investors to oppose the business ahead of its annual meeting, claiming the pay-out flouted normal corporate governance standards.

The long-term share plan allows Mr Kalifa to earn a maximum of 200pc of his £243,000 annual salary for four years until 2022.

ISS said it was raising concerns because there are no performance conditions attached to the award - a highly unusual situation for a British firm as directors normally only get a full bonus if they hit tough targets.

The rebellion comes just a day before international boss Moray MacLennan takes over as chief executive. 

An M&C Saatchi spokesman said the vote relates to a past pay policy and the rules will be changed for future schemes. He said: "The new non-executive directors are overseeing a comprehensive review of the group’s remuneration policies to ensure adherence to best practice in the future." 

Around 10pc of investors also rebelled in a vote to approve the company's 2019 report and accounts after a scandal over the firm's bookkeeping.

M&C Saatchi was revealed to have overstated its accounts by £14m after forensic experts from PwC unearthed irregularities dating back to 2014.

It prompted a boardroom clearout, with chief executive David Kershaw, executive chairman Jeremy Sinclair and executive director Bill Muirhead all agreeing to step down.

The trio of admen are know in the industry as the "three amigos" and were behind the famous "Labour isn't working" advert depicting a snaking dole queue which helped Margaret Thatcher become Prime Minister in 1979.  

Their departure followed that of director Lord (Maurice) Saatchi, who quit shortly after the accounting scandal broke, alongside non-executives Lord Dobbs - author of political thriller House of Cards - Sir Michael Peat, and Lorna Tilbian. 

M&C Saatchi announced in October that pressure from the pandemic had sent pre-tax profits tumbling to £2m for the six months to June, down 60pc on a year earlier.