At a general meeting this morning (16 February), shareholders in Liontrust narrowly voted in favour of a controversial increase to the executive pay for Liontrust's CEO and COO and the new long term incentive plan.
54.1% of votes were cast in favour of the new remuneration policy and 55.6% voted in favour of the long term incentive plan.
However, a spokesperson from Liontrust said while the board was "disappointed" in the result of the vote, "the remuneration committee is acutely conscious of the votes against and will reflect on feedback from those shareholders".
"The company will continue its policy of full transparency with proactive engagement with its shareholders on aspects of remuneration going forward," they said. "In line with the UK corporate governance code, we will provide an update within six months of this general meeting."
John Ions (pictured), chief executive of Liontrust, earned a total of £6.6m last year, despite a salary of £348k. Under the new proposed policy his salary would increase to £550k a year and he could be awarded up to 450% of his annual salary as a bonus for the next five years.
Meanwhile, chief operating officer Vinny Abrol will see his pay increase from £328k to £420k and could be awarded a bonus of 350% of his salary.
The new salaries take effect from 1 April 2022.
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Current policy was approved by shareholders in 2018 and in its document for shareholders it noted that the market capitalisation of the company had increased significantly in that time from £325m to £1.35bn at the end of December.
The document said the remuneration committed had undergone "detailed deliberations" and the new policy "aims to incentivise the executive team to continue to execute its proven strategy and drive growth both organically and through acquisitions".
Two influential shareholder groups Glass Lewis and ISS had recommended voting against the company resolutions.
In a report, Glass Lewis said: "Under the proposed policy, executives appear to be eligible for remuneration that significantly outpaces their peers.
"In particular, we are concerned with the individual limits under the LTI which, as they are expressed as a percentage of issued share capital, may allow for significantly increased payouts on the basis of movement in share capital.
"In addition, our concerns are somewhat exacerbated by the committee's decision to increase the chief executive and CFO/COO's base salaries by 58% and 28%, respectively, in FY2022."
Investment Week digital edition - 14 February 2022
Following the vote, the company said: "The board of Liontrust strongly believes that retaining and appropriately incentivising an exceptional management team, albeit on a highly competitive basis, is in the best interests of all our stakeholders."
They went on to add that "prior to the general meeting, the remuneration committee undertook extensive and positive engagement with our top 20 shareholders on the pay proposals for our executive directors.
"This included two rounds of engagement and consultation, and a number of amendments were made in response to these, among them the move to a more traditional annual LTIP structure rather than a one-off five-year plan and further stretch placed within the level of performance required to achieve maximum vesting under the LTIP.
"The committee is committed to the highest levels of governance and reiterates that exceptional levels of short and long-term remuneration will only be received by the executive directors for exceptional corporate performance."
