Shareholder advisory group Pirc has slammed British Land’s proposed re-appointment of Deloitte as its auditor.
In a report this week, Pirc raised concerns over the independence of the accountancy giant. It questioned the level of non-audit fees the REIT pays its property arm, Drivers Jonas Deloitte, for advice on the £1.6bn Meadowhall shopping centre.
It said Deloitte’s consultancy-related non-audit fees were £0.4m, of which £0.3m was paid to DJD in relation to 75 acres of development land around the 1.4m sq ft mall.
“This represents 80% of audit fees in 2011 and over 100% on a three-year aggregate basis. This level of non-audit fees raises independence concerns over the external auditors,” it added, before recommending shareholders oppose the move.
BL and joint owner London and Stamford are in negotiations to sell a 75% stake in the mall to Norway’s sovereign wealth fund, which would leave the REIT with 25% ownership.
Pirc also hit out at Chris Grigg’s proposed £1.9m pay packet – the most paid to any REIT boss – which it labelled as “excessive”.
Pirc said Grigg’s short- and long-term incentive awards, including matching share and vested recruitment awards, amounted to 624% of his £800,000 base salary
For the second year in a row it also criticised the company’s performance benchmarks for its long-term incentive plan for executives, claiming they were not “sufficiently challenging”.
Pirc has advised shareholders to reject the two key resolutions at BL’s annual meeting on 13 July.
Rival shareholder groups ABI and ISS have recommended all of BL’s resolutions.
Bridget.O’Connell@estatesgazette.com
