Unilever Freezes CEO Hein Schumacher's Salary Following Shareholder Rejection

Unilever plc revealed on Monday, Oct. 30, that its board made the decision to freeze the fixed pay of its chief executive officer, Hein Schumacher, for the next two years. The company will hold the fixed salary after the CEO's initial pay package was rejected by the shareholders five months ago.

Board's Voting for Executive Pay

According to Reuters, the pay deal for the firm's directors, including the CEO, was turned down during Unilever's annual general meeting with a near 60% majority. It was added that the board also has Nelson Peltz, an activist investor, and they instead proposed a deal for Schumacher, which consists of a €1.85 million base salary or around $1.96 million and a 20% increase on his predecessor Alan Jope's wage.

It was said that Unilever held a total of 37 meetings with its top 24 shareholders. The purpose of these meetings was to discuss the vote, and in the end, based on the feedback gathered, they decided on the pay freeze.

"The feedback received from this process informed us that the primary reason for the limited support for the DRR was the approach taken to setting the incoming CEO's remuneration on appointment," the company said in a press release that was published by the London Stock Exchange on Oct. 31. "Specifically, whilst the majority of shareholders agreed that the fixed pay level for the new CEO appropriately reflected the size and complexity of the role, there was a preference that alignment with the market could have been achieved gradually, rather than in one step on appointment."

Schumacher's Takeover of the Company

Schumacher was appointed as Unilever's new CEO only in July this year, and with the board's pay freeze decision, he will not be eligible for a fixed pay increase in the years - 2024 and 2025. The board may unfreeze his pay when the compensation committee convenes again to review his fixed pay level, two years from now.

Photo by: Unilever Media Assets