Pearson (PSON.L) is facing a major shareholder revolt following news of a controversial remuneration package for the CEO, which grants incoming boss Andy Bird a £7.4m ($3.75m) pay.
The stock has been trading lower this week, down 0.2% on Friday at 3pm London time.
Almost a third of investors in the FTSE 100 (^FTSE) educational publishing group voted down the plans for the former Disney director.
Bird does not have experience in the education sector. He has been a non-executive director on Pearson’s board since May. He will be joining the business at a time of great reinvention. It has been struggling to transition from selling printed books to creating desirable product offerings that appeal to digital customers.
The pay plan for Bird includes a contribution towards the rent of an apartment in New York, according to the Financial Times. Three top-20 shareholders told the publication they had “serious” concerns.
According to Reuters, management at the British firm said the move was necessary to secure a “rare” talent whose experience fitted with Pearson’s requirements.
Under the deal, Bird would receive a salary of at least $1.25m (£0.95m) fixed until 2023. He had the opportunity to double that amount if he met specific performance targets.
Beyond the one-off purchase of $3.75m of Pearson shares, equal to 300% of his salary, he could also receive shares worth $9.3m, which will be paid out in three instalments over three years.
“During this process, we have undertaken extensive engagement with our shareholders, in which Andy has been recognised as an outstanding candidate,” Sidney Taurel, chair of Pearson, said in a Reuters article.
Bird received multimillion-dollar annual remuneration packages while serving as an executive at Disney. He has been credited with expanding its global business, particularly across China and India.
He replaces John Fallon, who is retiring and has run the company since 2013.