Pearson - EGM 18 September 2020
Andy Bird will succeed the CEO John Fallon from 19 October 2020 under the condition to approve his generous remuneration package. To attract the former Disney executive used to double-digit million remunerations, Pearson proposes a new co-investment plan. This will stop the gap in remunerations between the CEOns appointment and the first vesting of the normal LTIP in three years. The co-investment award will vest in three equal tranches at the FYE in 2021, 2022 and 2023 and will be subject to performance underpins and continued employment.
Under this plan, Andy Bird will invest 300% of his base salary ($3.75 million) and will receive 1,208,861 Pearson shares (equalled to 750% of base salary). At the current share price of £5.594, the face value of the award decreased to £6.76m or $9.02m. This co-investment plan has neither robust performance targets nor long-term vesting period. So, ECGS does not consider it a long-term incentive. Furthermore, the Remuneration Committee will have too many discretion regarding the assessment of the plan.
We recommend shareholders to oppose the proposal which leads to excessive remuneration package without an adequate link to the long-term shareholder value creation.
Pearson is engaged as a learning company. Co. provides content, assessment and digital services to schools, colleges and universities, as well as professional and vocational education to learners to help increase their skills and employability prospects. Co.'s content includes: Bug Club, a school phonics reading programme for children; and enVisionMATH2:0, a maths curriculum. Co.'s assessment includes its U.K. qualifications, which is an awarding body, offering both academic and vocational qualifications. Co.'s services include its online programme management, which partner with colleges and universities to extend the reach of their degree programmes by scaling online.
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