E-Malt.com News article: UK & South Africa: SABMiller majority shareholders approved remuneration report

Shareholders holding 27.5 million SABMiller shares opposed the directors' remuneration report at the brewery's annual general meeting (AGM) in London last week, Business Report published August 01.

This represented just 2.3 percent of the shares that were voted at the meeting. The other 97.7 percent, equivalent to 1.17 billion shares, approved the remuneration report.

SABMiller has just less than 1.4 billion ordinary shares in issue and 1.2 billion of these shares were represented at the AGM, mainly by proxies.

The results of the votes on the various resolutions put to the meeting indicate that SABMiller's shareholders are very happy with the way management is running the beer group. Most of the resolutions received 99 percent support from the shareholders. The vote on the remuneration report reflected the lowest level of support for the directors.

From the nine-page remuneration report, it is clear that chief executive Graham Mackay was paid £2.4 million (R31 million) in salary, expenses and benefits for financial 2006, a comfortable increase on the £1.5 million he received for 2005.

What is more difficult to work out is that in addition to the £2.4 million, Mackay also benefited from retirement contributions to the tune of £262 000 in 2006. For some unexplained reason, this contribution is included as a footnote to the remuneration report.

Then there is the after-tax profit of about £1.7 million that Mackay made through the vesting of 341 000 shares, which he had received at no cost under the group's share incentive schemes. This means that Mackay's total package in 2006 was worth about £4.4 million.

In terms of the UK's Combined Code, shareholders have to get an opportunity to vote on executive remuneration. However, the vote is only advisory, it cannot block remuneration payments. It merely provides shareholders with the opportunity to express their approval or disapproval of the package.

The government is reviewing the code and is expected to adjust its requirements in regard to the quality of the disclosure on executive remuneration and bring them in line with regulations released last week by the US's Securities and Exchange Commission.

These new regulations place considerable emphasis on ensuring that remuneration disclosure is transparent and accessible to all shareholders.


02 August, 2006