Prominent shareholders in Pearson are moving to oust chair Sidney Taurel amid discontent over the pay package offered to the educational publisher’s new chief executive, Andy Bird, the Financial Times has reported.
Last month, a third of shareholders voted against a lucrative deal offered to former Disney director Bird, who will replace Pearson’s outgoing chief executive John Fallon next week.
Bird is to receive a $1.25 million base salary, enhanced by a share deal worth $9.375 million, paid in three tranches, if he continues to make an “appropriate level of continued progress” in Pearson’s strategy. His “golden hello” also includes a $240,000 annual allowance for a New York apartment.
But top shareholders in Pearson have reportedly told the FT that Taurel’s position is in danger because of his handling of the succession process.
One shareholder reportedly said that it was “definitely the case” that a significant group of investors “want [Taurel] to go”.
Another said: “This is not finished. I can’t say I’m happy with the chair’s handling [of the recent pay issue]. At some point, there have to be some board changes. Most people who voted for it [Bird’s pay package] were probably not happy.”
The shareholder noted that he among others were also unhappy with Pearson’s “dreadful returns” during Taurel’s tenure, which began in 2016, and his resistance to calls to replace Fallon following a series of profit warnings.
“There are shareholders who think the governance of the company has been disappointing and the chair bears ultimate responsibility,” the shareholder told the FT.
A third shareholder reportedly said that shareholders would “probe further” Bird’s succession, adding that “having two Americans in charge doesn’t sit well with UK investors”.
Any vote over Taurel’s reappointment is likely to be decided by Pearson’s top-five shareholders – Lindsell Train, Schroders, Silchester International Investors, Columbia Threadneedle and Cevian Capital – which together own more than 40% of the firm.
Pearson declined to comment when contacted by the FT.
Date published: 12 October 2020