Yet another top boss is paid handsomely while the company burns.
The pay package handed out to Trinity Mirror (LSE: TNI) boss Sly Bailey has had shareholders up in arms of late, and it's easy to see why.
With executive pay becoming increasingly disconnected from the money they actually earn for their employers (that is, their shareholders), disaffection is spreading amongst the ranks of everyday investors, and their voices are becoming increasingly harder to ignore in the country's boardrooms.
In this case, big investors are airing their displeasure too, after chief executive Ms Bailey was paid a total of £1.3m in cash, shares and pension contributions in 2011, despite Trinity Mirror having only last month reported a 40% fall in pre-tax profits, capping a dismal few years of falling profits, suspended dividends, and worrying levels of debt.
Collapsing value
The share price has collapsed too, falling from a 2009 peak of 192p to just 37p today, meaning that Ms Bailey has presided over a slashing of the company's capitalization. When she took over the top job in 2003, Trinity Mirror was valued at £1.1bn -- today it is worth just £97m.
The company's pension fund is suffering too, as the company has had to pursue a deal with its trustees to pare back its contributions in order to pay its dues to some of its creditors.
To answer some of the criticisms, the board of directors has decided to halve the value of any future cash bonuses paid to Ms Bailey, reducing it from a maximum of 110% of her basic salary to 55%.
Investors not calmed
But the move looks unlikely to stem the unrest, as they appear unwilling to budge on the overall levels of the boss's pay package, with share-based incentives boosted to compensate for any potential cash loss.
The board's actions appear to be at least partly aimed at avoiding a shareholder revolt at its upcoming AGM in May -- last year 11% voted against the CEO's pay deal, and a higher level of protest is expected this year.
But will it succeed in heading off the madding crowds? Major investors in Trinity Mirror include Schroders, Aviva, Standard Life, Royal London and Legal & General -- we'll find out next month whether they have the courage to press for shareholders' rights.
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