Landsec, one of Britain’s biggest property companies, is at risk of a shareholder rebellion after an influential adviser warned investors over the bumper pension package offered to its finance chief.
The Guardian has learned that the Investment Association’s Institutional Voting Information Service (IVIS) has issued Landsec’s annual report with a “red top” alert – its strongest possible objection – for failing to publish a credible plan that would bring Martin Greenslade’s pension pay in line with the wider workforce by 2022.
Greenslade pocketed a pension allowance worth £132,000 or 25% of his £528,000 base salary last year. While that allowance was reduced to 20% at the start of June, it is nearly twice the 10.5% rate offered to the wider workforce.
Landsec, which owns the Trinity Leeds shopping mall and Bluewater in Kent, as well as Deutsche Bank’s new London headquarters at 21 Moorfields, said in its annual report that the rate would be “subject to further consideration as part of the policy review in 2021”. Landsec declined to comment further. Its annual shareholder meeting will take place on 9 July.
The Investment Association, which represents City fund managers with £7.7tn worth of assets, warned companies last year they would be at risk of further shareholder revolts if they failed to comply with their 2022 deadline.
While shareholder advisory firms Glass Lewis and ISS have each backed the remuneration report, the pay controversy comes at a sensitive time for the commercial property industry. Companies such as Landsec have suffered from a drop in rents from tenants, including retailers, impacted by the Covid-19 outbreak.
Last month, Landsec announced it was cutting the value of its portfolio by nearly £1.2bn due to the pandemic, and warned the UK economy may not recover until 2022 at the earliest. Rival Intu Properties has since appointed administrators after the heavily indebted shopping centre owner failed to secure an agreement with its creditors.
Luke Hildyard, director of the High Pay Centre thinktank, said Landsec’s payout was “unseemly” in the current economic environment. “It’s pretty unseemly at the best of times, but given the current economic uncertainty when companies might think about reducing unnecessary costs, lavish pension awards for executives who already have more than enough money to retire into absolute luxury would be a sensible saving to prioritise.”