Experian under fire for promotion of CEO to chairman
(Guardian (UK) Via Acquire Media NewsEdge) The credit checking company Experian was under fire last night for promoting its chief executive, Don Robert, to chairman in a move that contravenes City corporate governance codes.
On the eve of the annual meeting where shareholders will vote on the election of directors to the board, the Institute of Directors (IoD) warned that the promotion of Robert was of significant concern.
The annual meeting in Dublin today will be chaired by Sir John Peace for the last time before Robert's elevation. Robert has been the chief executive since Experian was spun out of GUS in 2006. The matter risks becoming the third standoff between big City investors and Peace during this year's annual general meeting season.
Peace presided over a shareholder revolt about pay at the bank Standard Chartered, which he chairs, while last week investors voted down the remuneration report at Burberry, the fashion company he chairs.
Almost 53% of investors voted against the pay report at Burberry - a rare defeat -to protest against an award of pounds 15m shares to the new chief executive, Christopher Bailey, while at Standard Chartered 41% voted against the pay deals for its top management.
The IoD's focus is on the promotion of Robert rather than on pay, although Experian's annual report shows that long-term incentive plans and annual pay deals have handed him pounds 45m in the past five years.
The investor group the Investment Management Association has warned its members about the succession planning.
The IoD's corporate governance adviser, Oliver Parry, said: "Shareholders have understandably raised significant concerns about the decision of the board of Experian to appoint Mr Robert as their next chairman.
"Experian have contravened a key provision of the corporate governance code that a CEO should not go on to be chairman except in the most exceptional circumstances. The chairman's role is to lead the board in the oversight of the executive team, but without interfering in operational management. The former CEO is likely to find this a challenging task."
Robert is being replaced as chief executive by the finance director, Brian Cassin.
The City corporate governance codes operate on a comply or explain basis. The company declined to comment last night but at the time of his appointment in January, Experian said Robert had been selected as chairman because the company "will derive substantial benefit from ensuring the continuity of the senior leadership team into the medium term".
(c) 2014 Guardian Newspapers Limited.
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