Victory for Aegis pay rebels

MEDIA buyer Aegis has suffered a crushing defeat over its two-year pay contract for chief executive Doug Flynn. More than half its shareholders voted against the group's pay policy at company's annual meeting.

This is the first high-profile revolt this year, amid talk that the corporate governance crusade has run out of steam. Pharmaceuticals giant GlaxoSmithKline made corporate history last year, when it became the first FTSE 100 firm to have its pay policy voted down.

Aegis said: 'The board clearly registers shareholders' particular sensitivity to contractual notice periods and payments on termination.'

It will meet with shareholders to 'discuss the appropriate-steps which need to be taken'.

The National Association of Pension Funds and the Association of British Insurers had already made clear that they were unhappy with Flynn's contract. It would enable him to get close to £2m if the company is taken over.

The ABI said Aegis 'had failed to address the breach in best practice'. The NAPF said: 'It is obvious that shareholders had their own concerns about directors' accountability.'

The pay defeat overshadowed improved sales at Aegis. It said the recovery in advertising markets is 'taking hold in all three geographic regions' and that trading is 'ahead of budget'. Underlying revenues are up 4.8% for the past four months.