Imperial Brands - AGM 05 February 2020
Item 2: Advisory vote on the remuneration report. Despite the Board's discretion to reduce the bonus outcome, the executive remuneration level is excessive: the base salary exceeds peer medians and the total pension benefit is 30% of the CEO's base salary. This does not meet the new UK Corporate Governance Code provisions, the recommendation of the Investment Association to reduce pensions and our acceptable maximum level for the UK market. Despite challenging performance conditions, the CEO's remuneration is excessively weighted towards variable incentives. The main performance criterion - Adjusted EPS - overlaps in STI and LTI and may result in a payout of 180% of base salary in maximum.
Item 5: Re-election to the Board. In October 2019, Alison Cooper and the Board had agreed that she would step down from the role of Chief Executive Officer and the Board, once a suitable successor is found. Now the Board proposes to re-elect Alison Cooper to enable the succession and ensure an appropriate handover.
Item 6: Re-election to the Board. Mrs. Esperdy, former Senior Independent Director, became the Chairwoman of the Board on 1 January 2020.
Item 18: Share buyback. While the company has adopted Adjusted EPS as a performance metric accounting for a high percentage of variable remuneration, it is not explicitly indicated whether its performance plans will be adjusted for the impact of the repurchase program. Accordingly, we recommend that shareholders oppose this resolution.
Imperial Brands is comprised of two distinct businesses: Tobacco and Logistics. The Tobacco business comprises the manufacture, marketing and sale of tobacco and tobacco-related products, including sales to (but not by) the Logistics business. The Logistics business comprises the distribution of tobacco products for tobacco product manufacturers, including Co., as well as a range of non-tobacco products and services.
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