The RBS backlash continues: today Yell Group announced that its chairman Bob Scott, the man who signed off on Sir Fred ‘The Shred’ Goodwin’s £17m pension fund at RBS, will not be standing for re-election in July. Like some of his former colleagues on the RBS board, Scott has been publicly targeted by angry shareholder groups, which may help to explain this ‘personal decision’. But given that Yell is up to its eyeballs in debt and has just announced a £1bn pre-tax loss for the year to March, Sir Fred’s retirement fund isn’t the only reason for its investors to be restive…
Chairman at Yell since 2002, Scott was also the senior independent director at RBS, where he served as head of the remuneration committee that rubber-stamped Sir Fred’s exorbitant pension pot. The public outrage that ensued when this came to light has already forced ex-RBS chairman Sir Tom McKillop out of BP, and BP chairman Peter Sutherland (another ex-RBS man) may soon follow. Now it seems to have claimed Scott too: he announced his departure in a statement this morning, where he described Yell as a ‘first class company with a first class management team’.
Unfortunately for Scott, Yell is showing little evidence of this at the moment. Even despite a recent recovery, the yellow pages publisher has seen its share price collapse 70% in the last year; today it said that it had slipped from a profit of £311m in the previous year to a £1bn loss this time around, thanks largely to a slump in the value of its Spanish-language business. Yell is seeing its revenues plunge as more advertisers move online (where the company makes less money per sale), it’s very exposed to the struggling markets of the UK, the US and Spain, and it’s saddled with debts of £4.2bn. With numbers like these, it wouldn’t be surprising if shareholders were keen on a few changes at the top, regardless of external factors.
That said, investors do seem to be getting noticeably more militant – yesterday saw a remarkable rebellion by the shareholders at Royal Dutch Shell, who voted down the oil company’s latest remuneration plan, while Next shareholders also staged a mini-revolt against the retailer's pay deal. Clearly corporate bosses can’t expect pliant investors any more – although you might argue that this is shutting the gate after the horse has bolted...
In today's bulletin:
Yell chairman pensioned off amid RBS row
Mixed news for LSE as Dame Clara bows out
Recession big in Japan as economy slumps 4%
Small firms fear burgeoning health and safety costs
Do it right: Seven ways to leave gracefully