The CEO of Pearson, the UK's largest education publisher, is facing a backlash from investors over a proposed £13m pay deal. The maximum payout possible under the deal is 45 per cent higher than last year's potential package of £8.9m. Advisory groups Glass Lewis and ISS have branded the payment 'excessive', sparking concerns among investors.
According to reports, the proposed pay deal would see the CEO receive a base salary of £1.2m, with the remainder of the £13m payment made up of bonuses and other benefits. The payment is reportedly based on Pearson's performance over the past year, with the company's financial results released in March.
Investors are now calling for the pay deal to be reconsidered, with some arguing that it is not in line with the company's values. Pearson's investors are also concerned that the payment could be seen as inconsistent with the company's message on social responsibility.
The pay deal is subject to approval by Pearson's shareholders at the company's upcoming annual general meeting. If approved, the payment would be made to the CEO in July.
A spokesperson for Pearson has not commented on the proposed pay deal, citing the fact that the company's financial performance is not yet fully disclosed. However, the backlash from investors is likely to put pressure on the company to reconsider the pay deal.
The news raises questions about executive pay and the level of remuneration provided to CEOs in the UK. It also highlights the role of advisory groups in scrutinising pay deals and holding CEOs accountable for their actions.