Cairn backs down after pay revolt

Cairn Energy has withdrawn its proposal to give its non-executive Chairman, Sir Bill Gammell, share options worth £2.5m.

The award was first suggested in a circular to shareholders on January 10th as part of Sir Bill's reward package for securing the sale of a controlling stake in Cairn India last year to Vedanta Resources for $5.5bn.

In an announcement today, however, Cairn says institutional shareholders have opposed the award, and so it will not be offered for approval at a general meeting scheduled for the 30th of January.

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The Association of British Insurers sounded the alarm over Sir Bill's reward package which also included a £1m donation to youth sports charities in Scotland and £1.4m in cash. The Financial Times has reported that shareholders are angry the award contains no performance criteria.

Shares in Cairn Energy have dropped 34% in the past 12 months despite the successful disposal in India.

BS