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Shareholder rebels give BG Group a shock over boss Helge Lund’s £31m pay deal

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Shareholder rebels give BG Group a shock over boss Helge Lund’s £31m pay deal


PUBLISHED: 00:20, 6 May 2015 | UPDATED: 00:20, 6 May 2015

BG Group faced a rebellion against boss Helge Lund’s massive pay deal after nearly one in five shareholders at the oil and gas giant’s annual meeting refused to back its remuneration report.

Chief executive Lund, who joined the company on February 9 from Norway’s oil giant Statoil, could be in line for a pay and perks package of £25-£31million if he meets every condition of his bonuses and long term share awards.

The group’s AGM, held at Reading’s Hilton Hotel yesterday, also revealed more than 15 per cent did not back the re-election of Sir John Hood as chairman of its remuneration committee.

BG, which is in the process of being bought by Royal Dutch Shell in a £47billion deal, offered no apology for Lund’s ‘excessive’ pay, despite calls by shareholders.

Mark Bentley, a director at shareholder group ShareSociety, who also represents a group of small shareholders from Germany called DSW (Deutsche Schutzvereinigung für Wertpapierbesitz), said: ‘I think the remuneration committee has let shareholders and UK Plc down in agreeing this massive package.May I request an apology?’

Bentley’s question raised a round of applause from the room and chairman Andrew Gould admitted the group misjudged the public reaction but did not apologise.

The protest vote is particularly large despite suggestions that some opposition had subsided following Shell’s offer for the company and the subsequent rise in the shares. DSW criticised Lund’s package and said the potential remuneration payable is ‘excessive’.

It added: ‘The proposed takeover is likely to take place early next year, so Lund will receive one year’s salary, pension and benefits, he will also be eligible for a bonus payment of up to 200 per cent of salary. Upon change of control he will receive a further 12 month’s salary, pension and benefits.’

Bentley told the Mail: ‘How can this be justified? The Shell bid had nothing to do with him and was completely out of his control.’

BG initially faced shareholder activism after it revealed the pay package of the former Statoil boss in October. The board reduced the expected value of Lund’s initial share award from around £10million to closer to £4.7million in December. But shareholders are still unhappy at the overall size.

The £47billion offer by Shell to buy BG last month could mean that Lund’s package is valued at up £31million. 

Lund, who has been boss for 12 weeks, said he had ‘mixed emotions’ over the offer by Shell and said a takeover was not on his mind. Shell’s takeover bid, first raised in a mid-March phone call between Shell chief executive Ben van Beurden and BG’s Gould, was announced on April 7.

DSW and ShareSociety were also unhappy with other payments at BG including for chief financial officer Simon Lowth.

Nearly 18 per cent of voting shareholders opposed BG’s remuneration report and more than 13 per cent voted against the re-election of Hood taking the total to 19.5 per cent and 15.5 per cent when counting the number of votes withheld. 

All resolutions were passed. Hood has already faced shareholder activism at advertising giant WPP. He became chair of its remuneration committee in January last year. WPP has suffered pay backlashes due to the millions paid to founder and chief executive, Sir Martin Sorrell.

BG (up 10p to 1197p) said the final package that Lund will receive is yet to be worked out and approved.


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Screen Shot 2015-05-06 at 08.54.08BG shareholders rebel over Lund’s ‘outrageous’ £29m package

The man who arrived to lead BG Group just in time to see the company agree a sale to Royal Dutch Shell has sparked a protest vote over pay.

Helge Lund (right) began work at BG just weeks before Shell tabled a £45 billion offer, which BG’s board accepted. However, the chief executive could earn about £29 million for just more than a year’s work if he meets targets, some of which will be ticked off automatically by dint of Shell’s takeover premium.

Some 18 per cent of shareholders voted against the company’s pay report at BG’s annul meeting in Reading.

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