UK’s Corporate Governance Code recommends that pay for non-executive directors should not include options
Quindell’s corporate governance has been criticised by shareholder group Pensions Investment Research Consultants (Pirc) over its decision to grant share options to its new non-executive chairman Richard Rose.
On Monday it said that former credit hire executive Rose would join as chairman, and receive options on 8.7m shares, as part of his pay package.
The deal goes against the UK’s Corporate Governance Code — a guide to best practice — which recommends that pay for non-executive directors should not include options, the Financial Times reports.
Shareholder advisory group head of governance at Pirc Tim Bush said: “It’s impossible to overstate how unacceptable this is.
“The chairman should be able to stand back from all the conflicts that arise in the remuneration and incentivisation of executives. With this, he’s plonked himself in the middle of it.”
The troubled insurance outsourcer has also hired one-time Prudential chief executive Jim Sutcliffe as strategy director and deputy chairman
Sutcliffe has also received options to 10.9m shares, and will be paid consultancy income by Quindell.
Quindell’s three top executives — chief executive Robert Fielding, European head Robert Thomson, and North America head Tim Scurry — will together receive 11.6m share options.
The share options granted on Monday represent 7.1% of Quindell’s share capital, according to reports.
Quindell’s share price broke through the £1 barrier in yesterday’s trading after the troubled insurance outsourcer revealed it had hired Rose as chairman.
Rose replaces interim non-executive chairman David Currie, who stepped into the role after the departure of Rob Terry in November under the cloud of a controversial share deal.
Quindell has hired accounting firm PwC to conduct an independent review of its business, including its main accounting policies and expectations of cash generation in 2015.