Struggling drinks giant Diageo faces investor pay revolt

Diageo, the struggling proprietor of Guinness and Johnnie Walker whisky, is facing an capitalist backlash adjacent period implicit astir £8.5m successful banal awards handed to the frontrunner to go its adjacent main executive.

Sky News has learnt that investors successful Diageo are being urged to ballot against its wage study astatine its yearly gathering successful aboriginal November due to the fact that of disquiet implicit the deficiency of show conditions attached to shares awarded to Nik Jhangiani.

Mr Jhangiani joined the company, which besides owns Baileys and Smirnoff, arsenic its concern main conscionable implicit a twelvemonth ago.

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In July, helium was elevated to go interim main enforcement pursuing Debra Crew's ousting implicit the company's lacklustre performance.

Glass Lewis, 1 of the starring proxy advisers which makes recommendations to organization shareholders connected voting decisions, has called connected them to reason Diageo's wage study due to the fact that of Mr Jhangiani's recruitment awards.

"Given the important quantum of the awards, astir £8.48m, we judge that shareholders whitethorn reasonably person expected greater clarification arsenic to the determination of the conditions associated with specified awards," Glass Lewis said.

"In the lack of a cogent rationale arsenic to the non-performance-based quality of the bulk of awards, we judge this contented precludes shareholder enactment for this connection astatine this time."

The remuneration study ballot is advisory only, and the effect is not binding connected Diageo.

In effect to Glass Lewis's recommendation, a Diageo spokesperson said: "The recruitment statement was predominantly made successful shares and was to compensate Nik for what helium forfeited from his erstwhile leader upon joining Diageo.

"When determining the operation and worth of a recruitment arrangement, the Remuneration Committee looks to guarantee that immoderate specified compensation has a just value, nary higher than that of the awards forfeited.

"As an enforcement director, Nik is taxable to a shareholding request some during his tenure and connected a post-employment basis."

Mr Jhangiani is wide regarded arsenic the astir apt imperishable successor to Ms Crew, with an assignment said to beryllium imaginable arsenic aboriginal arsenic adjacent month.