Unilever will engage more with its shareholders and has learned lessons from investors' opposition to the consumer goods group's pay policy, a company executive has revealed, in response to questions from a British parliamentary committee.
Unilever, Britain's third largest company by value, has faced two investor revolts this year, calling into question how closely the maker of Marmite and Dove soap listens to the concerns of its shareholders.
The compensation plan was opposed by more than a third of Unilever's UK shareholders in May, though it passed by a majority. Earlier this month, the company withdrew a proposal to relocate its headquarters in the Netherlands after it became clear the plan might not get the required approval.
Shareholder Engagement
Peter Newhouse, executive vice president for reward at Unilever, told parliament's Business, Energy and Industrial Strategy (BEIS) Committee that Unilever was engaging with shareholders and planning meetings for the second half of October, following the minority opposition to the pay policy.
Newhouse was appearing before the committee as part of its inquiry into executive pay and measures being taken to tackle excessive boardroom pay awards.
He said the company would also discuss with shareholders in coming weeks the failed relocation plan, aimed at scrapping Unilever's dual-headed Anglo-Dutch structure.
Newhouse was asked whether there was a pattern of shareholder opposition at Unilever, with one committee member suggesting that things could improve if the company engaged sooner with shareholders prior to big decisions.
"I understand what you're saying," Newhouse said. "It sounds like a sensible way of looking at it."
When asked if Unilever had a good record of engaging with shareholders, Newhouse said: "Everybody could improve."
Phased Approach
Newhouse said Unilever talked to shareholders for two years about its proposals on pay, before implementing them in two phases. The first phase garnered wide support, he said, though the second did not.
When it came to the question of the move to the Netherlands, the company has said it discussed this with more than 200 shareholders.
Newhouse also said that change was difficult and shareholders were currently very sensitive to topics like investor pay.
"If you want to change things, especially if you want to change things radically, it's quite difficult to explain a lot of moving parts simultaneously," he said regarding the compensation policy. "I also think sensitivity around executive pay has definitely changed over the two years we were making these proposals. These are things we need to take into account."
Unilever will report third-quarter results on Thursday.
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