Unilever Faces Shareholder Backlash Over Executive Pay
FMCG giant Unilever is under pressure from investors after more than one-third of shareholders rejected the company’s latest executive pay package at its annual general meeting. The vote signals growing investor discontent over remuneration practices, particularly during a period of sluggish performance.
According to the official vote count, 36.5% of shareholders opposed the directors’ remuneration report, with particular concern directed at the reported pay package for the newly appointed CEO, Hein Schumacher. For 2023, Schumacher received a total compensation of £6.3 million, including a £1.7 million bonus, less than a year after stepping into the role.
The opposition also follows last year’s 58% vote against the company’s remuneration policy updates. Although Unilever has attempted to address prior concerns, this latest result underscores persistent dissatisfaction among institutional investors. Organizations like Glass Lewis and the Investment Association had flagged the executive pay policy ahead of the vote, citing misalignment with shareholder interests and performance outcomes.
Unilever defended its pay structure, arguing that the changes were necessary to attract a high-calibre leader such as Schumacher. The board emphasised that the revised pay policy reflects global benchmarks and was put in place based on detailed analysis and feedback.
The backlash comes at a pivotal time for the business. Unilever has faced criticism for lacklustre sales growth and for becoming overly focused on brand purpose at the expense of core financial performance. In response, Schumacher launched a strategic reset earlier this year aimed at simplifying operations, streamlining the portfolio, and delivering more consistent growth.
Industry watchers will now be closely monitoring how Unilever balances executive incentives with shareholder expectations. With other leading FMCG companies also under increasing scrutiny over ESG and governance practices, the outcome of Unilever’s pay vote may have broader implications across the sector.
Despite the setback, the vote on the remuneration report is non-binding. Still, the size of the rebellion places pressure on Unilever to better align leadership compensation with company performance as it navigates competitive pressures and evolving investor priorities.