CRH chief executive Albert Manifold has defended his remuneration after 40 per cent of shareholders voted against a new plan that could earn him an annual bonus of more than €8 million.
A motion to grant Mr Manifold a maximum annual bonus payment of up to 225 per cent of his salary, as well as a share plan of up to 365 per cent of pay over the coming years, was passed at the company’s annual general meeting yesterday .
Addressing reporters after the meeting, Mr Manifold said: “I recognise I’m well paid.”
He added that as head of a FTSE 100 company, his remuneration was in line with industry standards and based on onerous performance targets.
“If I were to achieve a large portion of that potential compensation package, it would only be in the case whereby shareholders would themselves achieve superior returns on their investment in CRH,” Mr Manifold said.
Potential €8.2 million
CRH lists the chief executive’s base salary at €1.4 million for 2016 in its annual report. The new reward plan, which compares to a previous maximum bonus of 150 per cent of salary and share plan of up to 250 per cent, could see Mr Manifold achieve an annual bonus pot of as much as €8.2 million.
While common in the UK corporate world, shareholder pay revolts are rare in Ireland. Two years ago, then Aer Lingus chief executive Christoph Mueller’s €1.5 million pay package scraped through an agm vote by a razor-thin margin as support from its largest shareholder Ryanair outweighed a Government vote against.
Yesterday, drug company Shire, which relocated its corporate domicile to Ireland from the UK in 2008, won just enough support for its director remuneration report at its agm in Dublin. More than 49 per cent of shareholders voted against a deal that gave chief executive Flemming Ornskov a 25 per cent pay rise.
During CRH’s meeting yesterday, the chairman of the group’s remuneration committee, Don McGovern, defended the group’s new policy, which also involves potential bonus increases for other executives at the company. He said he canvassed the views of holders of more half of CRH’s shares in setting it up and that the new plan is in no way linked to acquisitions CRH makes.
Last year saw CRH complete its biggest deal to date, the €6.5 billion purchase of assets offloaded by European rivals Lafarge and Holcim under to appease competition authorities as part of their merger.
Luxembourg subsidiary
CRH also found itself questioned by shareholder David McCabe, a chartered accountant, about its use of a Luxembourg subsidiary which pays very little tax.
The Irish Times reported in November that the Luxembourg unit, CRH North America Luxembourg Sarl, paid tax of $470,000 (€414,000) in 2014 on profits of almost $125 million.
CRH finance director Senan Murphy said the company uses Luxembourg as a location in which to carry out some financing and fundraising activities for other parts of the group and that the group paid an effective tax rate of close to 30 per cent last year.
“We do seek to maximise value for shareholders, so all of our operations are legitimately organised in a tax efficient manner,” Mr Murphy said.
Mr Manifold played down the group’s appetite for further acquisitions when asked by reporters about his company’s reported interested in Indian assets of LafargeHolcim, which are currently up for sale with a $1.5 billion price tag.
