After just four months on the job, Gam chief executive Peter Sanderson has bagged CHF 1.1m (€1m).
One fifth of the fund group’s shareholders voted against Gam’s compensation report at the firm’s AGM on 30 April, with 79% in favour.
Around 12% of shareholders also opposed the compensation for the board of directors.
The announcement comes at a time when companies are under increasing scrutiny for how they pay their senior management teams as the coronavirus pandemic sees mass redundancies and furloughs.
Excluding the compensation report, the other measures each received support of at least 91%.
Third year running
This is the third year shareholders have been urged to reject executives’ pay at the Swiss manager.
Last year, 27% of shareholders voted against Gam’s compensation report but this was down substantially from the 54% that rejected the pay package proposals in 2017.
Both the Institutional Shareholder Services and Pensions & Investment Research Consultants have been critical of the calculations used to determine bonus payments for Gam’s top brass.
The chief executive and chief financial officer have their bonuses capped relative to the firm’s underlying profits before tax, but other executives at the firm do not.
Scrapping bonuses for senior execs
The backlash over executive pay comes despite the Swiss fund house announcing it would scrap bonuses for its senior executives for the 2019 financial year.
This was prompted after profits tanked to CHF 10.5m (£8.3m), down 90% from CHF 126.7m (£100.2m) in 2018.
Sanderson, who was not eligible for an annual bonus that year, agreed to forego a contractual fixed cash award worth CHF 250k (£198k) he was due to receive.
Sanderson was the highest paid member of Gam’s management board last year despite only stepping into the role on 1 September 2019.
He was awarded CHF1.1m which included a one-off fixed award of shares with a face value of CHF 750k (£617k).
In total, Gam paid out CHF 5.4m to members of the group’s management board, including CHF 757k (£622k) to chief financial officer Richard McNamara.
Chairman David Jacob, who was previously the group’s interim chief executive after Alexander Friedman left following a scandal involving Gam’s absolute return range, walked away with CHF 354k (£284k) last year.
Since the covid-19 outbreak, Gam’s board of directors has agreed to waive a portion of its fees. They received CHF 4.5m (£3.7m) in fixed compensation for 2019, less than the CHF 6m (£4.9m) they had requested.
Jacob said he was delighted all proposals had passed. “On behalf of the board of directors, I would like to thank our shareholders for their continued trust and support during these challenging times.”
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