The NUJ has urged rebel shareholders at Trinity Mirror to block proposals for a new pay package for chief executive Sly Bailey – and use her bonus to save journalists’ jobs.
Figures released by the company yesterday showed Bailey earned a base salary of £750,000 in 2012 and a short-term cash bonus worth a further 30 per cent of salary, with her pension contributions totalling another £248,000.
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She also received 503,000 shares worth an extra £396,000 which vest in 2014 and could earn a further 762,000 shares by 2014.
Trinity’s remuneration board proposed Bailey’s maximum potential annual cash bonus be cut from 110 per cent of her base salary to 55 per cent. But the board also recommended a long-term bonus rise from 80 per cent of salary to 144 per cent.
In total Bailey was paid £1.3m in cash, shares and pension contributions in 2011, down from £1.7m in 2010.
According to the FT, despite cutting the cash bonuses of its top executives by more than 60 per cent and revising its long-term incentive plan, investors are still set to ‘demand an explanation from the board over the size of its executive pay packages given the dismal performance of the publishing group”.
The company reported a 40 per cent year on year fall in pre-tax profit last month.
One top 10 investor told the FT: ‘The pay plan is a wholly inadequate response by the board to consistent and strong messages from top shareholders unhappy at Ms Bailey’s pay and the group’s performance. The board’s response is ridiculous. They have effectively ignored us.”
Outgoing Trinity chairman Sir Ian Gibson defended Bailey, saying: ‘We responded to some shareholder comments that we ought to make the shareholder package significantly biased towards longer-term performance and shares, so that they felt assured that management’s interests were aligned with theirs.
‘Overall remuneration structures should not reflect market capitalisation. If our market capitalisation doubled overnight – and at our level it could – we wouldn’t double executive remuneration.”
NUJ Northern & Midlands Organiser Chris Morley said: ‘On the day she started work as Trinity Mirror chief executive in February, 2003, Sly wrote to every employee and said that the real strength of the business lay ‘most importantly of all’ in its people.
‘But, last month, she continued her wearying agenda of cuts by calling for £15 million more savings this year. The NUJ demands that she shows a lead now and gives up her own cash bonanza to help keep more journalists in their jobs nurse her damaged company back to health.
‘It is a step in the right direction that non-executive directors, who have previously blithely ratcheted up their boardroom pals’ pay without real regard to the company’s size, have now twigged that a system of rewards needs to be based on real performance and growth and be reliant on future employment into the future. But the system shareholders are being asked to approve for next year is still way too weighted towards instant gratification.”