Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government
Issue link: https://fhpublishing.uberflip.com/i/347201
UTILITY WEEK | 18Th - 24Th JULY 2014 | 19 Finance & Investment This week Revolt urged against Severn Trent exec pay Advisory group Pirc urges shareholders to vote down pay deal that allows 'excessive' bonuses Investors have been advised to vote against Severn Trent Water's remuneration policy, which could see new chief executive Liv Garfield pocket £2.4 million in her first year. The advisory group Pensions and Investment Research Consultants (Pirc) issued a note calling on investors to oppose the water company's pay policy for its executive direc- tors at its AGM on Wednesday (16 July). Pirc criticised the "greatly increased" long-term incentive plan (LTIP) policy, which has been changed since Garfield's arrival in April to allow the chief execu- tive to be awarded a bonus of up to 125 per cent (up from 70 per cent), and 80 per cent for other executives (up from 50 per cent). Garfield receives a basic salary of £650,000, which means she could be eligible for an LTIP award of up to £812,500, alongside a bonus of up to £780,000 and a pension contribution of £162,500. The investor group said the executives' potential rewards under the scheme were "considered to be exces- sive" because they could be 270 per cent of basic salary. Pirc also criticised the LTIP for not being "sufficiently long-term" and for allowing directors to amend perfor- mance conditions without shareholder approval. Chairman Andrew Duff also came in for criticism and Pirc advised investors to vote against his chairmanship because "there are concerns over him chairing two FTSE 350 companies". Severn Trent declined to comment. MB REnEWAbLEs Crown Estate boosts wave and tidal The UK moved closer to getting its first wave and tidal array last week when the Crown Estate confirmed leasing agreements for marine energy sites, as well as plans for a future leasing round for tidal range projects. The estate has set out agree- ments which will help advance five wave and tidal stream pro- ject sites, each with the potential to deliver between 10MW and 30MW. There are currently no arrays of multiple devices in UK waters. The Crown Estate has also confirmed seabed rights for six new wave and tidal stream dem- onstration zones to help develop wave and tidal stream technolo- gies. For the first time, locally based organisations will be able to manage and sub-let parts of the seabed to a range of wave and tidal stream developers. ELEcTRIcITY Funding boost for project to cut cost of offshore wind A project to cut the cost of offshore wind by at least 10 per cent has been awarded £2.2 mil- lion by the Scottish Government. The Carbon Trust's Off- shore Wind Accelerator (OWA) programme, a joint industry and government scheme, brings together nine offshore wind developers with more than 72 per cent (31GW) of the UK's licensed offshore wind capacity. The OWA will receive £200,000 in 2014/15 and a fur- ther £2 million in 2015/16. The project will look at shar- ing knowledge and establishing best practice in all technical areas of building offshore projects, from foundations to cable-laying, as well as support- ing the commercialisation of floating offshore windfarms for Scottish waters. Scottish first minister Alex Salmond said Scotland was home to around a quarter of Europe's offshore wind resources. ELEcTRIcITY Ofgem okays Scots £1.2bn subsea cable Ofgem has approved plans for a £1.2 billion subsea cable to con- nect the electricity grid on either side of the Moray Firth in north Scotland. Scottish Hydro Electricity Transmission's cable is due for completion in 2018 and will enable 1.2GW of renewable generation in northern Scotland to export to the grid. "This is a major step forward for an essential upgrade to the high-voltage grid," said Ofgem's senior partner for transmission, Martin Crouch. Garfield: first year in post as chief executive Stock watch 730 720 710 700 690 680 670 Drax share price, 9-15 July 9 Jul 10 Jul 11 Jul 14 Jul 15 Jul 760 740 720 700 680 660 640 620 600 Drax share price, 15 april - 14 July 15 Apr 12 May 2 Jun 23 Jun 14 Jul Drax shares rallied almost 6.5 per cent in half an hour on 14 July following news that the high court ruled against the government's decision to exclude one of its planned biomass conversion units from government funding. The share price touched highs of 727p around midday but eased back to 700p by the next day. The rise helped to reverse some of the heavy losses seen in April when the government announced the unit's ineligibility.