Sovereign to cut board pay
HOME equity release firm Sovereign Reversions said yesterday its directors would take a significant pay cut if they manage to fight off a rebellion from shareholders seeking to oust the board and put the group into run-off.
In a letter to shareholders, non-executive director John Gummer, a Conservative party MP, said Sovereign would “propose long-term incentive packages for the executive directors which will allow their base salaries to be reduced significantly”.
He added that the remuneration earmarked for the directors proposed by the dissident investors could reach in excess of £5m if they manage to sell off all the Aim-listed firm’s assets.
“The directors believe this is totally disproportionate for a company with a market capitalisation of £22.7m,” Gummer wrote.
Sovereign’s board were paid a combined £389,677 over the year to April 2009, including benefits. This was itself a substantial reduction on the £470,960 paid to the board over the previous year, which included bonuses for chief executive Graeme Marshall and executive director Rupert Pearce Gould.
The news comes after City PM revealed yesterday that Countrywide chairman Harry Hill, who is leading the rebel shareholders, had provoked outrage at the firm by sending out proxy voting cards with boxes already ticked in favour of his proposals.
Hill proposes to remove Marshall, Pearce Gould and non-executive chairman Paul Spencer from the board and instate himself and Peter Gordon as directors and Michael Campbell as non-executive chairman.
Shareholders are due to vote on the resolutions at a special meeting on 2 September.