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Governance Concerns Cause Investor Revolt at Bellway

Global Glimpses | January 27, 2009

Investors in a UK-listed company have voted to reject its policy on executive pay amid concerns that it had breached corporate governance best practice.

The “no” vote is the first time that shareholders have rejected a remuneration report since 2003, when investors threw out pay plans at pharmaceutical company GlaxoSmithKline.

At the annual general meeting of house building company Bellway, the majority of shareholders voted against the board’s remuneration report. The move followed a briefing from the Association of British Insurers (ABI), a powerful shareholder group, which criticized the company’s behavior.

In a rare “red-top” alert, the ABI warned shareholders that the company had breached corporate governance best practice in awarding bonuses to the chief executive and two executives. It said the company had scrapped the directors’ original bonus targets when it became clear they were not going...

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