LONDON (The Deal) -- Activist investor Sandell Asset Management on Monday revived its dormant campaign at FirstGroup -- owner of Greyhound Lines in the U.S. -- by declaring it will vote against the bus and train operator's remuneration report and proposing a board candidate it claims would plug a gap in the leadership of its American operations.
FirstGroup has its annual shareholders' meeting on July 16. Tom Sandell, whose firm has a 3.1% FirstGroup stake, noted in an open letter to Chairman John McFarlane that the CEO pay package has ballooned by 209% over the past five years and that CEO Tim O'Toole is paid more than his peers, even though FirstGroup shares have underperformed them by 239% over that five-year period.
"We strongly believe that management's and shareholders' interests should be aligned and that properly structured rewards can incentivise management teams. We simply do not believe that a 94% rise in remuneration package is deserved for Mr. O'Toole's 2013/14 performance," wrote Tom Sandell.
Sandell in the letter also called on FirstGroup to install its own unidentified nominee as an independent non-executive director to plug what it claims is missing "sector expertise" with regards to FirstGroup's U.S. businesses. Sandell said the firm had other "highly qualified independent candidates" waiting in the wings should the first candidate be deemed unsuitable.
And he professed "significant concern" that McFarlane had apparently told the investor on a call that he wanted CEO O'Toole to meet with the mystery candidate before proposing him to the company's nominations committee.