Shareholders take aim at new targets in row over directors' pay

HSBC, ICI and Tesco are the next of Britain's biggest companies to face a showdown with shareholders in the controversy over payments for failure in boardrooms.

The companies are bracing themselves for revolts at their annual meetings after investors in GlaxoSmithKline voted down a pay packet for its chief executive on Monday which could have seen him walk away with up to £22m if sacked from the drugs giant.

At HSBC, William Aldinger, head of its newly acquired US business, is in line for £24m over three years. He would receive a substantial proportion of the cash even if he were fired. He has access to the company's jet for his private use and is entitled to private health care for him and his wife for life, courtesy of HSBC.

The outcry at lavish rewards for directors and so-called golden goodbyes has been fuelled this year by the Government's decision to change company law to allow shareholders to participate in an advisory vote on directors' pay.

Patricia Hewitt, the Trade and Industry Secretary, has praised Glaxo shareholders for taking action against the remuneration of Jean-Pierre Garnier. Ms Hewitt said yesterday that it was not the job of politicians to set corporate pay levels and responsibility lay primarily with boards and shareholders. However, she hinted that a DTI consultation paper expected in the next few weeks would include an option of making shareholder votes binding rather than advisory.

"We have no problem with big rewards for big success but I do have an issue with rewards for failure," she said. "When directors walk away from failing companies with huge pay-offs it's bad for shareholders, bad for employees and bad for the UK corporate governance image."Shareholders in HSBC have been urged to reject its pay report at its meeting a week on Friday, while ICI is set for a rough ride tomorrow over a pay-off for its ousted chief, Brendan O'Neill. Sir Terry Leahy, chief executive of Tesco, is heading for a bruising at the shareholder meeting in June.