Shareholders back ‘excessive’ Diageo bonuses

Diageo has garnered “overwhelming support” from its shareholders for bonuses criticised by some as “excessive” at its annual meeting.

The drinks giant, which claims to be Scotland’s largest manufacturing exporter, won the support of 97% of its investors for its past year’s pay and the policy for future years, as reported by the Herald Scotland, despite concerns over its executive pay packets being raised ahead of the group’s annual AGM yesterday.

Mr Menezes is set to be paid £7.7 million for the year to the end of June in pay and bonuses, while his predecessor, Paul Walsh, has been awarded £6.4m for his final three months at the firm.

Finance director Deirdre Mahlan, who earns a basic salary of £706,000, received £3.7 million.

On Wednesday, shareholder corporate governance group, Pirc, branded the bonuses as “excessive”.

Lord Davies, chairman of the group’s remuneration committee, said at the AGM: “We have had overwhelming support [for the remuneration policy and report] from our shareholders.

“We are competitive. We are not overpaying. We did not pay big bonuses because the performance was not there.”

Executives received 8% of their maximum bonus possible after the group missed targets on sales growth, pre-tax profits and cash flow after a slowdown in its sales in emerging markets such as China, Brazil and India.

Earlier this year Diageo reported a loss of £1.1 billion in its 2013/14 financial results attributed largely to the “severe impact” of China’s on-going crackdown on extravagant gift giving.