4/26/2026
Cevian Capital Backs Pearson Boss’ Pay Rise
London Times (04/26/26) Powell, Emma
Cevian Capital has said it will back a contentious plan that could hand the boss of Pearson (LON: PSON) a multimillion-pound pay increase amid a fight for global talent that has involved American executives being given outsized payouts. The education group has put forward a revised pay arrangement that would see Omar Abbosh, its chief executive, receive up to £12.8 million in total remuneration this year, deemed “excessive” by Glass Lewis and ISS, two influential shareholder advisory groups. The maximum payout would be an increase of about 45% on last year’s total potential package of £8.9 million, excluding the buyout by Pearson of share awards that he would have been entitled to under his previous employment. Cevian Capital, which in recent months has steadily built its stake to just over 18% to become Pearson’s largest shareholder, insisted that the policy had “clear pay-for-performance” that would encourage “long-term value creation." Alexander Svensson, a partner at Cevian, said: “Like many other leading UK companies, Pearson competes globally for talent, and support for its remuneration policy is key for retaining and incentivizing best-in-class leadership.” Research from Deloitte showed that 16 of the 55 FTSE 100 companies that have published their annual reports for last year had proposed significant pay increases to executive pay. The support from Cevian came despite both Glass Lewis and ISS recommending that shareholders vote against the executive pay proposals at the company’s annual meeting on May 1, which could leave it facing its third consecutive shareholder revolt over its pay policy. Pearson suffered shareholder rebellions over a change in its executive pay policy in 2020 and 2023. In 2023, just over 46% of investors voted against an increase in payout for Andy Bird, now 62, the former Disney executive who preceded Abbosh, in a binding vote. ISS told investors that the “substantial increase in the executives’ remuneration package and the resultant quantum are deemed excessive and are disproportionate to the company’s growth over the past few years." To qualify for the maximum payout Abbosh, 60, would need to meet certain performance-based targets including achieving a return on capital of 16% this year, compared with 11% last year, and adjusted operating profit growth of 14%, up from 6%. Abbosh’s fixed pay of £1.02 million would remain the same this year. Glass Lewis said that “shareholders may have reservations about the magnitude” of the increase in maximum rewards available under the long-term incentive plan, which would position the company at the upper end of the FTSE 100 despite its positioning in the lower quartile of the index” in market-value terms. Abbosh, a former Microsoft executive, was appointed to lead the FTSE 100 constituent at the start of 2024 and has sought to position the group as a technology-focused business that can benefit from the rise of artificial intelligence. A spokeswoman for Pearson said: “We firmly believe that a performance-based approach to pay, dependent on the delivery of strong earnings growth and shareholder returns, is aligned to the interests of our shareholders. “As such, we have materially increased the threshold and maximum payout targets, which will require delivery of exceptional performance against a redefined competitor set including some of the largest and most profitable companies globally.” Its proposed remuneration policy had “been carefully considered to reflect the commercial reality of the talent markets in which we compete, especially in a technology and AI-driven era,” the spokeswoman added.
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