JLL’s second-largest shareholder has asked analysts at a corporate governance analysis firm to review JLL’s pay and corporate governance practices following an $11M compensation package given to outgoing CEO Colin Dyer.
In an email to Institutional Shareholder Services (ISS), which was published in a filing with the Securities and Exchange Commission, Generation Investment Management co-chief investment officer Mark Ferguson called the executive compensation section of JLL’s proxy report a depressing read for shareholders.
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“The $11M-plus compensation package awarded to the outgoing CEO (Colin Dyer) seems wholly inappropriate,” Ferguson writes. “Diving into the sordid details of Mr. Dyer’s 'Retirement Agreement' makes one wonder whether the 'Retirement Agreement' was written by Mr. Dyer himself rather than independent board members supposedly acting in the interest of shareholders.”
To further support his argument, Ferguson writes that the CEO at CBRE was paid less than half the amount awarded Dyer despite CBRE being significantly larger and better run.
Generation, co-founded by past U.S. vice president Al Gore in 2004, owns 7.53% of JLL’s stock. The company says it will vote against JLL’s compensation plan and encourage other shareholders to do the same.
This is not the first time Generation has spoken out against CEO severance packages, also known as a "golden parachute," which are typically decided on beforehand should a CEO be dismissed, retire or the company undergo a merger. In a report entitled "Sustainable Capitalism" from 2012, the firm advocated tying executive compensation to companies' long-term financial performance.
"While the absolute amount that executives and fund managers receive in pay should be debated ... This action will create a more sustainable society by closely linking pay with long-term performance that takes both financial and ESG metrics into consideration for a comprehensive evaluation," Generation states.
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