the times | Saturday September 5 2020 2GM 49
Business
Simon Duke Technology Business Editor
Pearson is on a collision course with in-
vestors over a $9 million “golden hello”
for its new boss and a $240,000 annual
allowance for a New York apartment.
Glass Lewis, the influential adviser,
recommended that investors reject the
“excessive” pay package for Andy Bird,
who is due to take charge of the educa-
tion publisher next month.
The FTSE 100 group will put the
former Disney executive’s remunera-
tion deal to a vote the week after next.
If investors reject his contract Pearson’s
succession planning would be thrown
into disarray.
Mr Bird’s elevation from his role as an
independent director hinges on a
majority of shareholders backing the
pay agreement.
The clash comes as institutional
investors stage rebellions over pay,
citing concerns that executives are not
sharing the pain from the economic
slump. M&G, Aviva, and Legal & Gen-
eral have opposed at least one in four
remuneration reports for FTSE 350
companies this year.
Ryanair shareholders are expected to
rebuke its board amid anger over a
€450,000 bonus for Michael O’Leary,
the chief executive, who has furloughed
staff and taken pandemic support.
Pearson, a former conglomerate that
is now the world’s biggest education
publisher, has been searching for a new
chief executive since December, when
John Fallon served his notice.
Under Mr Fallon, 58, Pearson shed
assets such as the Financial Times, but
its market value halved as it struggled
with the shift to digital learning.
Mr Bird, 56, who ran Disney’s inter-
national division between 2004 and
2018, joined Pearson’s board as a non-
executive director in May.
Last month The Times revealed thathe had interviewed several candidates
for the top job before applying for it in
June.
Sidney Taurel, chairman, said Pear-
son identified Mr Bird as its preferred
candidate to succeed Mr Fallon a year
ago, but that he had not wanted a full-
time position until recently.
“This doesn’t sit easily with allowing
him to interview candidates and see the
list of candidates,” a leading investor
said.
Mr Bird, who will continue to be
based in Los Angeles, where his family
lives, has been hired on a contract
considered generous for a company in
the lower reaches of the FTSE 100.
The Warrington-born executive will
earn a salary of $1.25 million and will
pocket as much as 500 per cent of his
base pay in performance-related
bonuses. The company will hand him
$9.4 million worth of stock over three
years, provided he hits his targets. Mrcommodities currencies
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50454035
Aug 6 14 24 Sept 1 Aug 7 17 25 Sept 2 Aug 7 17 25 Sept 2 Aug 7 17 25 Sept 2 Aug 7 17 25 Sept 2 Aug 7 17 25 Sept 2Investors demand bosses share economic pain from pandemic
Pearson set for clash over
chief ’s $9m ‘golden hello’
Taurel, 71, insists Mr Bird has the skills
needed to sharpen Pearson’s digital
transformation and that such talent
does not come cheap. However, Glass
Lewis said the “recruitment award is
excessive” and criticised the lack of
transparency around the performance
conditions and the absence of “robust
targets”.
The vote will be decided by four funds
that hold about 40 per cent of Pearson
shares, including Lindsell Train,
Schroder Investment Management
and Silchester International. Cevian,
the activist that recently bought 8.5 per
cent, has said that Mr Bird would bring
“entrepreneurial experience and high
energy to Pearson”.
Mr Taurel said yesterday that Mr
Bird possessed a “rare combination” of
global and digital experience and that
Pearson needed to offer a “competitive
package required to secure a candidate
of his calibre”.Slow start New cars are stored at the Rockingham Motor Speedway track in Corby until they can find buyers. Registrations fell by nearly 6 per cent in August. Page 54
GEOFF ROBINSONWeak US job
gains trigger
market fears
for recovery
Robert Miller
Wall Street staged a late rally to pull
back from a second day of heavy losses
led by technology stocks after US jobs
figures sparked concern about the re-
covery from the Covid-19 recession.
When US markets opened yesterday
morning they dropped sharply into the
red after the US Labor Departmnet
said non-farm payrolls increased by
1.3 million jobs last month after rising
by 1.7 million in July.
Although the unemployment rate
fell to 8.4 per cent from 10.2 per cent in
July, it still means that the world’s
largest economy has recovered slightly
fewer than half the jobs lost at the start
of the coronavirus lockdowns.
Lydia Boussour, senior US economist
at Oxford Economics, said: “The fact
employment is settling into a trend of
slower, grinding growth is worrisome
for the broader recovery and points to
increased scarring from the crisis.”
The Nasdaq was down by 1 per cent
at 11,313.13, ending a five-week winningstreak. It was down 3.3 per cent for the
week, its worst fall since the week end-
ing March 20 when it fell 12.6 per cent.
The Dow Jones industrial average
closed down 0.6 per cent at 28,133.31 —
1.8 per cent lower for the week, while
the S&P 500 was 0.8 per cent lower at
3,426.96, a weekly loss of 2.3 per cent
and its worst drop since the week end-
ing June 26 when it fell 2.9 per cent.
European markets fared little better.
In London the FTSE 100 index fell
0.9 per cent on the day to 5,799.08, a
weekly fall of 2.8 per cent and 23.1 per
cent lower than the start of the year.
Shares in four of the country’s largest
housebuilders were among the biggest
losers after the Competition and
Markets Authority said it had started
enforcement action over the sale of
leasehold properties. Barratt Develop-
ments fell 7 per cent; Countryside Prop-
erties was down by 4.5 per cent; Taylor
Wimpey 5 per cent; and Persimmon
5.2 per cent.
Time to ditch tech? Money, page 596 The recent rally that drove the
tech-heavy Nasdaq index to its 42nd
record close of the year could be
explained by the “Nasdaq whale”.
Softbank earned the nickname after
the Japanese conglomerate bought
billions of dollars’ worth of US
equity derivatives and stoked the
fevered rise in big tech stocks,
according to the Financial Times. It
has been buying up options in the
shares during the past month in
huge amounts.