Glass Lewis Urge Schroders Shareholders To Rebel Over £6m Bonus Of CEO


    Schroders, a fund manager, is at risk of a backlash from its shareholders after an influential advisory company issued a warning regarding the “excessive” bonuses and the appointment of a Schroder family member to the board of the company.

    Glass Lewis has recommended that at the annual meeting that is set next month, the investors should vote against the pay report of the company, as well as the election of Leonie Schroder. It claims that she lacks the experience required to challenge the executive team of the company.

    It has also urged the investors to stop the re-election of Michael Dobson as chairman. Glass Lewis says that he is responsible for the make-up of the board and “should be held accountable for this failure.”

    The advisory group said that it had “severe reservations” regarding supporting the pay report because of the size of the bonuses that are granted to Peter Harrison, its chief executive. Harrison has been at the helm since 2016. He was given a bonus that amounted to £6 million last year on a £500,000 salary.

    Glass Lewis stated: “We remain concerned that the annual bonus plan has consistently led to unnecessarily high payouts.”

    It added: “We cannot recommend that shareholders support this proposal.”

    A spokesperson for Schroders said that the firm has a “clear and thorough process” for determining pay “which we have followed rigorously and which has served the firm and all its stakeholders well over many years.”

    The report of Glass Lewis also takes aim at Leonie Schroder, whose family holds a 35 percent controlling stake in the business. She was appointed last March after the death of Bruno Schroders, her father.

    Glass Lewis said that controlling shareholders should be “entitled” to representation, however, it emphasised that the directors need to have the experience to challenge and guide the executive team.

    The advisory firm explained: “We do not believe a sufficiently robust rationale has been presented for the election of nominee [Leonie] Schroder, and question whether, in representing her family interests, she has sufficient core industry or sector experience to effectively challenge management,”

    Schroders said that the decision to appoint Leonie Schroder comes after consultations with key members of the family trust and main shareholder group after the death of Bruno last February.

    A spokesperson stated: “After careful consideration, the nominations committee decided to recommend to the board her appointment as a director.”

    She added: “As part of the nominations process, the company also engaged with a number of institutional shareholders – all indicated support for the proposal to appoint Leonie Schroder, given the overall mix of skills on the board and the majority of independent non-executive directors.”

    The Schroders AGM is scheduled to be held in London on the 2nd of May.