Investors in Countrywide have expressed fury over the company’s proposed new incentive scheme, which could result in its top executives receiving a £20 million handout.
According to Sky News, leading City institutions plan to oppose the new scheme which forms part of a £140 million rescue fundraising to keep the company afloat.
Peter Long, Countrywide’s executive chairman, could receive stock worth well over £6 million under the Absolute Growth Plan (AGP), which would replace the estate agent’s existing long-term incentive plan.
Two other board executives – Paul Creffield, the new group managing director, and chief financial officer Himanshu Raja – could receive shares valued at more than £8 million and £7 million respectively.
Several big shareholders have vowed to vote against the plans at a meeting on 28 August, although they are not hopeful of blocking them because Oaktree, a private equity group which owns 30% of Countrywide’s shares, is expected to support them, Sky News said.
Long also chairs Royal Mail Group, which saw more than 70% of shareholders rebelling against its remuneration report last month.
Institutional Shareholder Services (ISS), an influential adviser on voting decisions, said the estate agent’s investors should oppose its new remuneration policy and the implementation of the AGP.
ISS labelled the scheme as excessive and unduly complex, and warned that the “calculation of awards is not specified”.
“No compelling explanation has been provided as to why the proposed arrangement is essential to effectively implementing the group’s strategy and turnaround plan,” ISS said.
The IVIS service, operated under the auspices of the Investment Association, has also alerted City institutions to details of Countrywide’s plans.
According to sources who have seen its report, it has “red-topped” the company’s EGM in relation to changes to shareholder voting rights, while it has given an “‘amber top” to the remuneration proposals.
Documents suggest the AGP would only pay out above a series of specific benchmarks relating to the overall value of the company.
Up to 15 executives will participate in the new framework, with no individual receiving shares worth more than 15% of the overall value of the incentive pot. However, one shareholder pointed out that existing investors had effectively seen their holdings wiped out by the rescue refinancing.