Proxy advisory firm Institutional Shareholder Services (ISS) wants AXA shareholders not to give their go-ahead when it’s time to vote for or against chief executive Thomas Buberl’s proposed remuneration package.
Later this month, the Paris-headquartered insurance group is holding its shareholders’ meeting where several resolutions will be up for investors’ approval. These include the resolution to back Buberl’s new compensation numbers.
The insurer’s 77-page notice of meeting reads: “The board of directors, on the recommendation of its compensation & governance committee, decided to modify, as of the date of his renewal of term of office, certain components of the chief executive officer’s compensation as follows: increased the annual fixed compensation to €1.65 million (from €1.45 million, representing a 2.2% annual increase since 2016 and a 13.8% increase overall); increased the amount of annual target variable compensation (to €1.75 million from €1.45 million previously); reduced the variable ceiling from 150% to 130%...; modified the deferral mechanism to further align with shareholders’ interests…; [and] increased weighting of the long-term component paid in AXA shares…”
AXA noted that Buberl’s compensation package, which had not been adjusted since his first appointment as CEO in September 2016, was subject to a thorough review – resulting in the abovementioned proposal.
Additionally, the insurer stated: “The board of directors decided that, in accordance with the company’s past practice, this new compensation package should remain unchanged for the duration of the chief executive officer’s next term as a director (i.e. until April 2026).
“The board, therefore, paid particular attention to establishing a new compensation package that is balanced, aligned with the interests of shareholders, and that can remain sufficiently competitive throughout this period.”
ISS, however, disagrees with the proposed move.
A report by the Financial Times quoted ISS as asserting: “Without further rationale supporting the intended positioning of the CEO’s remuneration compared to [certain] benchmarks, especially above their median, it is impossible to guarantee that these benchmarks are fair.”
Proxy advisory firm Glass Lewis, on the other hand, considers the proposed increase adequately justified.
AXA’s shareholders’ meeting is taking place on April 28 in Paris.