BG backs down on CEO pay

The new CEO of energy giant BG, Helge Lund, has accepted a lower salary package following a shareholder revolt.

Energy giant BG Group bowed to shareholder pressure by slashing a controversial pay deal for incoming chief executive Helge Lund.

Facing a potential high-profile revolt at its annual general meeting on 15 December, the firm dropped the 'golden hello' share award of £12m for Lund "after extensive shareholder consultation".

Under the company's long-term incentive plan, Lund will instead be granted an initial award of shares worth £4.7m, reducing his overall package by around £5m. And 62% of his salary package will be linked to his performance at the group.

What the commentators said

Simon Walker, head of the Institute of Directors, who had previously branded the original pay award "excessive" and "inflammatory", also sounded mollified. "While substantial, the total remuneration is reduced and now falls within proper limits for a company of BG's size and international importance."

"On the face of it, this looks like a victory for those who claim that the system works," said James Moore in The Independent. "The shareholders spoke, the company listened, all those guidelines bearing the legend comply or explain' operated effectively. Huzzah!" But is that really true?

"Mr Lund is apparently a talented executive, but he's still being paid as if he's the business equivalent of Lionel Messi he'll still get £4.7m up front, a £1.5m salary, a bonus, and a long-term incentive scheme worth up to six times his basic pay."

And his remuneration is still 30% above that of the bosses of BP and Royal Dutch Shell, BG's two larger London-listed rivals, as The Guardian noted. Perhaps the shareholders could still do better.

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