Pearson has been rocked by an embarrassing shareholder revolt over a lavish pay packet handed to its new boss.
The education publisher came under fire for agreeing to give Andy Bird, 56, a ‘golden hello’ worth £7million and another £185,000 to go towards the rent of an apartment in New York. He will also earn up to £5.9million a year.
Ahead of a meeting to approve his appointment yesterday, shareholders had complained of being ‘held to ransom’ by Pearson and complained that the package was far too generous.
Eyebrows were also raised after it emerged Bird – who was previously a non-executive director – had interviewed other potential chief executive candidates before deciding to put himself forward.
He is a media industry veteran who previously ran Walt Disney’s international arm, and will be tasked with beefing up Pearson’s digital business.
But advisory services ISS and Glass Lewis had both urged shareholders to oppose Bird’s appointment, saying his golden hello had not been properly justified.
It prompted a rebellion at the meeting, with 33 per cent of votes cast against his pay, although Pearson’s plan was still approved overall.
And the significant level of opposition was noted by the company in a statement afterwards.
Throughout the row, Pearson has insisted Bird is the best man for the job – even going so far as to call him a ‘rare’ talent – and worth the hefty pay packet.
Yesterday it added that it had ‘engaged extensively with shareholders during this process’ and would ‘continue to engage’ with them.
Pearson has endured a tumultuous four years as it adapts from selling textbooks via book shops to online courseware.
Outgoing boss John Fallon, who Bird will replace next month, cut thousands of jobs, sold assets and issued a string of profit warnings during his tenure.
Bird will continue living in California, splitting his time between there and New York.
With Pearson’s biggest slice of sales coming from the US, analysts have suggested this could help him arrest the difficulties it has been having in North America.