Imperial Brands caves in to fury over chief’s £8.5 million pay

Imperial Brands has bowed to intense shareholder and political pressure to scrap a new deal that could have given its boss a £3 million pay rise.

The tobacco giant behind the JPS and Golden Virginia brands admitted it faced anger from investors about plans to increase the pay of chief executive Alison Cooper, finance director Oliver Tant and chief development officer Matthew Phillips.

Cooper, one of only seven FTSE 100 female bosses, got £5.5 million last year. The proposals would have seen her pay rise to a potential £8.5 million had she hit all targets this year.

The move puts pressure on other big businesses to follow suit and suggests there could be a break on executive pay for the first time in decades.

That would be a victory for small shareholders and campaigners who have argued for years that boardroom rewards are out of control and bear no relationship to performance.

Imperial claimed it feared losing or being unable to attract the very top talent as the level of pay it offered had fallen behind some rivals.

Last year Theresa May pledged a crackdown on executive pay in the wake of “irresponsible” and “careless” behaviour at the top level.

BlackRock — the biggest fund manager in the world — this month wrote to 300 top UK firms, saying it was irritated at bosses’ pay and demanding action. Today, Imperial admitted the “climate” had changed. It said it would ditch plans to ask investors at the February AGM to vote to amend pay deals.

Chairman Mark Williamson said: “Though we received considerable support, it is clear that views have changed over that time and that the right course of action now is for the board to withdraw the resolution.”

Imperial says it still thinks pay should go up but admitted investors would not have approved. Williamson added: “The board continues to believe that revising the policy is necessary for retaining and attracting the right calibre of talent to ensure the sustainable growth.”

Imperial shareholders include fund manager Neil Woodford and Capital, where the Prime Minister’s husband, Philip May, is a relationship manager.

BlackRock had threatened to vote against directors it didn’t think were sufficiently robust on pay.