U.K. self-storage operator Big Yellow Group PLC may have a difficult time getting its revamped remuneration policy passed when shareholders meet this week. The company has proposed executive salary increases of as high as 40 percent to occur over a three-year period. Investment firm Royal London Asset Management (RLAM), one of the operator’s largest shareholders, has already indicated it will oppose the pay hike, according to the source.
“We have long-standing concerns about pay at Big Yellow Group, and we will be voting against the firm’s remuneration report and remuneration policy, as well as against the chairman of the remuneration committee,” said Ashley Hamilton Claxton, head of responsible investment at RLAM. “We are concerned by large salary increases of up to 40 percent for the executive directors over the next three years. This will have the effect of ratcheting up performance-based pay that’s set as a multiple of salary.”
Under the plan, chief executive James Gibson’s annual salary would jump from £302,000 to £440,000 by April 2020. Similarly, executive chairman Nicholas Vetch would bump from £275,000 to £375,000 during the same period, the source reported.
“While we welcome the introduction of a holding period for long-term awards under the firm’s new remuneration policy, we are concerned that variable pay will be more heavily geared toward short-term performance under the new plan,” Claxton said.
Big Yellow’s adjusted pre-tax profit growth during the last five years has been 110 percent, while revenue has increased 62 percent during the same period.
Competitor Safestore Holdings PLC has faced similar shareholder opposition to proposed changes to its remuneration policy.
Big Yellow Group operates 96 self-storage locations in the United Kingdom under the Big Yellow Self Storage and Armadillo Self Storage brand names, with most concentrated in Greater London. Its total portfolio comprises 5.6 million square feet.
Property Week, Big Yellow Faces Shareholder Revolt Over Proposed Salary Rises