Marmite-to-Dove soap giant Unilever has admitted failing to talk to shareholders in the run-up to its ill-fated decision to move its corporate HQ to the Netherlands.
In a cross-party committee hearing with MPs, Unilever said it had learned “lessons” from recent actions, less than two weeks after an embarrassing U-turn saw it ditch plans to move from London to Rotterdam following investor pressure.
Peter Newham, director and executive vice president for reward at Unilever, told the Business, Energy and Industrial Strategy Committee that the group had
also failed to seek shareholder views earlier enough on pay plans for top bosses.
Committee chairwoman Rachel Reeves said there was a “pattern” of investor discontent at decisions being made by Unilever’s board.
She said: “Perhaps you could improve things by discussing things with shareholders a little bit sooner and therefore making recommendations as a board that your shareholders – the owners of the company – are more supportive of?
“Do you think there’s a lesson to be learnt?”
Mr Newhouse agreed and said there was also a “good lesson for us” after trying to push through significant changes to executive pay.
MP Peter Kyle accused Royal Mail of going “weak at the knees” in negotiations with powerful chief executives.
He said the company appeared to be “intensely focused on the needs of the chief executives and blind to the considerations of the shareholders”.
Orna Ni-Chionna, chairwoman of Royal Mail’s remuneration committee, said the firm failed to proactively talk to shareholders beforehand over the leaving payment for Ms Greene, which included a full-year cash bonus of £774,000.
Its pay plans were voted down by more than 70% of investors at its annual general meeting in July.
Ms Ni-Chionna said: “It was a big mistake for us to make.
“I really am embarrassed that we got this engagement with shareholders so wrong.”
The Committee also grilled Royal Mail over a £5.8 million payout to Mr Back made just before he was promoted from General Logistics Systems (GLS) – Royal Mail’s European parcels business – to the post of group chief executive.
Ms Reeves slammed the Royal Mail over board “complacency” following the payment, on which Mr Back did not pay UK tax.
She said the sum could have instead been used to employ more than 250 workers to deliver post for the group.
Ms Ni-Chionna denied complacency on the board and insisted “we are very keen Royal Mail survives and thrives”.
On the issue of Mr Back’s £5.8 million payment, a Royal Mail spokesman added: “The buyout payment was made to Rico Back when he was chief executive of GLS in July 2017.
“As you would expect for any employee, he paid tax at that time in the normal way: through GLS payroll in the Netherlands. This is where GLS is headquartered.”