Salvesen faces contracts revolt

TROUBLED haulier Christian Salvesen faces a shareholder revolt at its annual meeting today as investors protest against chief executive Edward Roderick's two-year rolling contract, which would hand him a £1m payout if forced out of the company.

Roderick is under pressure after a woeful performance from Salvesen over the six years of his tenure, punctuated by a string of recent profits warnings and last month's decision to slash the dividend by 45%.

But in a clear breach of corporate governance best practice guidelines, Roderick and his finance director Peter Aspden have both refused give up their rights to two years' pay if they are sacked or if they leave as a result of a takeover. Its lowly rating means Salvesen is regularly touted as a bid target.

The remuneration committee, chaired by retiring Salvesen chairman Jonathan Fry, has reviewed Roderick and Aspden's contracts, but concluded it was prepared to remain in breach of National Association of Pension Funds' guidelines.

Two major institutional investors are refusing to support the board's stance, while another said it is only backing it at the agm after private soundings that new chairman David Fish will dump two-year contracts.

Two year 'rollers' have emerged as one of the worst boardroom abuses in the furore over 'rewards for failure', where underperforming executives can walk away with huge compensation payments.

The extended contracts of high profile executives like Jean-Pierre Garnier at GlaxoSmithKline and Matt Barrett at Barclays have created stinks during the AGM season.

An NAPF spokesman said: 'We think it is inappropriate that directors' contracts should be longer than 12 months.'

City sources close to Salvesen admitted the company could make no 'compelling argument' to retain the two-year contracts but conceded that a greater furore could be created if Roderick and Aspden insist on being compensated for paring back their contracts to one year.

Salvesen's accounts show Roderick, 50, was paid £429,000 last year. Pension payments would take his compensation to £1m if he were to leave.

Salvesen's shares have been a poor investment ever since Hays' Ronnie Frost came knocking with a £1.1bn 400p a share takeover plan in 1996.