An overwhelming majority of shareholders in London-based property group Liberty International re-elected Donald Gordon as the group's chairman, brushing aside calls that they abstain in the chairman's re-election.
During the annual meeting held on Wednesday, Gordon's chairmanship received 97% backing from the votes cast by shareholders.
The call for shareholders to abstain from backing Gordon's chairmanship came from the UK's National Association of Pension Funds, and Pensions Investment Research Consultants.
Reasons forwarded for opposition to Gordon's chairmanship was that he sat on Liberty's remuneration committee, which together with his chairmanship, could result in a conflict of interests. The main concern was that the independence of the remuneration committee was being compromised.
A Liberty director and chairman of the remuneration committee, Robin Baillie, said yesterday that independence was a state of mind.
"It derives from the character and the integrity of the individual concerned," said Baillie. He continued to justify Gordon's position in the remuneration committee.
In the company's view Gordon's service to the remuneration committee was necessary because remuneration packages and incentives were a vital area in which any chairman would expect to be involved, said Baillie.
In respect of his own remuneration, Gordon excused himself from the discussion, said Baillie.
"His remuneration is therefore set by the other remuneration committee members, who take into account all relevant factors, including comparative data from other companies and his contribution to the business," said Baillie.
He said remuneration levels for the chairman and executive directors were considered to be around the median of FTSE 100 and FTSE mid-cap real estate companies.
Gordon said shareholders who have voted against the reappointment of key directors should find another company to invest in.
Gordon, who founded Liberty, has increased his interest in the group to just below 25% in the past few months.
The critical increase of his shareholding came when the group implemented a £159-million share issue in November last year. The share issue came with an entitlement for Gordon to take up 50% of the 28.4 million new Liberty shares issued.
Gordon's interest in the company was estimated at 19% before this transaction and increased to more than 22% after the share issue.
The share issue catapulted Liberty into the FTSE 100 index, allowing Gordon's realise his dream.
Capital raised from the share issue was to be used to reduce debt and fund the group's ambitious expansion programme.
During the course of last year the group committed itself to new business worth more than £500-million.
Business Day
Publisher: Business Day
Source: Business Day
