Berkeley suffers investors' brickbats over pay policy

Berkeley Group, the upmarket housebuilder, yesterday suffered one of Britain's biggest shareholder revolts over a £1.2m payment for its managing director, Tony Pidgley.

Almost 47% of its investors who voted registered their disapproval of the retrospective payment to Mr Pidgley, a former Barnardo's baby who founded the group almost 30 years ago.

The scale of the protest is the largest recorded by Pirc, the corporate governance body, for a mid cap company this year.

Only two other companies, pharmaceuticals group GlaxoSmithKline and aerospace firm BAE, have endured fiercer protests since investors were given the right to vote on pay policies this year, Pirc said. Both GSK and BAE are considerably larger than Berkeley.

The property group had tried to head off the rebellion at yesterday's annual meeting with a surprise acknowledgment a week ago that the payment to Mr Pidgley was "clearly undesirable and not in accordance with best practice". Its chairman, Roger Lewis, promised to make changes.

But the Association of British Insurers, whose members control almost a quarter of the stock market, said the level of the protest demon strated the concern about the company's pay deals. It had been in negotiation with Berkeley even before yesterday's meeting, seeking change.

"We will be monitoring the company to make sure they fulfil their commitments," the ABI said.

The National Association of Pension Funds, which advised its members to vote against the pay policy, said it was pleased with the volume of support for its campaign for good corporate governance.

The company had sent its senior non-executive, Victoria Mitchell, to a series of meetings with shareholders to explain the £1.2m payment to Mr Pidgley. He was suddenly added to a long-term incentive plan during the year and then treated as if he had been a member of it for three years.

Morley, a big City investor which voted against the remuneration report, said: "We are highly supportive of the actions of Berkeley's non-executive director in terms of her willingness to engage proactively in a constructive discussion. But that still doesn't change our objection to the substantive aspects of the remuneration scheme."

The housebuilder argued that Mr Pidgley was accidentally left out of the scheme but this apparently failed to appease shareholders. Votes against the remuneration report comprised 29% of the poll. The protest reached almost 47% with the addition of deliberate abstentions.

Pirc calculated that proxy votes received ahead of the meeting amounted to 73% of the maximum possible poll.