Tesco, HSBC Next In Line Over Fat Cat Pay

London, May 20: | Updated: May 21 2003, 05:30am hrs
A leading British corporate governance group took aim at directors pay at supermarket group Tesco and banking giant HSBC on Tuesday, a day after Britains biggest-ever shareholder revolt over the issue.

Europes top drug-maker GlaxoSmithKline (GSK) was licking its wounds after shareholders voted down a costly executive compensation scheme.

PIRC (Pensions Investment Research Consultants), which had advised people to vote against the GSK pay deal, said it would urge investors to vote down an executive pay package at HSBC. They said that they had concerns over Tescos contracts for directors.

Glaxo was definitely a watershed day, PIRC research director Stuart Bell told Reuters. We would argue that the Tesco remuneration package is overgenerous and has inadequate performance targets, while HSBC has a large termination package for one of its incoming directors, Mr Bell said. BWD Rensburg fund manager Colin Morton said that although investors did not have a problem with directors earning millions if companies were performing well, they did have concerns if contracts rewarded failure.

Mr Morton said that some attacks over salaries at listed companies were unfair. People dont seem to mind the fact that pop stars and footballers are earnings millions, he said. GlaxoSmithKline felt the fury of investors over a golden parachute deal that meant chief executive Jean-Pierre Garnier could get up to $36 million if he lost his job.

PIRC said HSBCs deal for Mr William Aldinger who joined after his previous employer Household International was taken over by HSBC. ... Mr Aldinger could get $30 million if hes dismissed, Mr Bell said. (Reuters)