AGM alert: a £20m salary for reviving this FTSE 100 company

A major overhaul of Diageo (LSE:DGE) incentives that could land its boss £20 million a year in return for reviving the fortunes of the drinks giant is set for an AGM vote next month.

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Planned changes to the remuneration policy will mean the mix of Dave Lewis's pay package determined by long-term performance increases to 68% from 62% previously.

The new arrangements are worth up to £15 million, which includes a potential annual bonus opportunity of up to 200% of his £1.55 million salary.  The sum rises to £20 million when assuming 50% share price appreciation over the performance period.

The vesting of long-term incentive shares worth up to 525% of his salary will be assessed against metrics including earnings and cash flow but not relative total shareholder return.

Diageo said in its annual report that it will no longer benchmark against the likes of Heineken NV (EURONEXT:HEIA) and Pernod Ricard SA (EURONEXT:RI) because it struggled to build a robust and appropriate peer group.

The company, which ranked 15th out of 17 firms in the three years to June, slashed its dividend by 52% in its most recent financial year and suffered a 17% share price decline.

An executive share option plan, which is worth up to 125% of Lewis's salary, will also now be tied to share price recovery after Diageo proposed the removal of performance conditions.

The Guinness and Smirnoff owner said: “Since 2014 we have not changed our overall incentive design or increased the opportunity level. As a result, we are no longer competitive in our key markets.”

Diageo

When: 2.30pm, Thursday 5 November.

Where: Convene 133 Houndsditch, London, EC3A 7DB.

How to participate: As a hybrid meeting, shareholders will be able to participate and attend the AGM electronically or in person. Proxy voting instructions should be returned no later than 2.30pm, Tuesday 3 November. More AGM details can be found here.

Who's in the chair? John Manzoni joined the board in October 2020 and was appointed chair in February 2025. He is a former chief executive of the UK Civil Service and current chair of SSE.

How did the company do in the year to 30 June? Organic net sales fell 2%, reflecting a 0.4% decline in volumes and price/mix impact of 1.6%. Operating profit rose 2% to $5.7 billion as cost savings lifted the margin by 116 basis points to 28.9%. Reported operating profit declined 27.2% to $3.2 billion and earnings per share by 26.3% to 78.1 US cents. Net debt of $20.5 billion led to a debt ratio of 3.1 times adjusted earnings. A new dividend policy as part of balance sheet strengthening reduced the payment due on 3 December by 52% to 30 US cents a share. The total for the year is 50 US cents, down from 103.48 US cents the year before.

How have shares performed? Down 17% to 1,522.5p (1,622p on Thursday).

How much were the bosses paid? Dave Lewis joined Diageo at the start of 2026 on a salary of £1.5 million before October's increase to £1.545 million as part of a 3% pay rise for executive directors. The former Tesco boss got a total of £1.43 million in relation to 2025/26, including cash and deferred shares worth £528,000 after the annual bonus scheme paid 35.2% of the maximum opportunity. The single figure for finance chief Nik Jhangiani, who served as interim boss from July to the end of 2025, amounted to £2.6 million. This included an annual bonus of £649,000 based on 28.5% of the maximum and £636,000 in relation to a tranche of performance shares awarded when he joined Diageo.

How was variable pay determined? Operating profit growth of 2% was just above the threshold performance as one of three financial metrics used to determine the annual bonus. Operating cash flow of £4.8 billion was between threshold and target performance, while a 2% decline in net sales value was below. The 12.7% vesting outcome for the long-term incentives granted to ex-chief financial officer Lavanya Chandrashekar in 2023 reflected environmental, social and governance goals, with all other measures below threshold performance. Relative total shareholder return ranked 15th out of the company's 17-strong peer group.

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What's in the new remuneration policy? Diageo intends to retain its hybrid long-term incentive plan structure, which comprises a Performance Share Plan (PSP) and Senior Executive Share Option Plan (SESOP). The overall maximum opportunity for executive directors will include a rise for the CEO to 650% of salary from 500% previously. This will be driven by a 40% increase in the PSP from 375% to 525%. The SESOP will stay at 125% but performance conditions will be removed, with value driven by share price appreciation. Under the PSP, threshold vesting will remain at 20% of maximum but with on-target vesting reduced from 60% to 50%. No changes are proposed to the opportunity under the annual bonus scheme, which will remain at 100% of salary at target and 200% of salary for the maximum performance.

What's the CEO's maximum opportunity? The new arrangements mean Lewis's maximum pay package is worth £15 million, which includes his annual bonus and grant of long-term incentives. This rises to £20 million when assuming 50% share price appreciation over the performance period. The on-target result is £9.4 million.

Why the changes? Diageo's remuneration committee said its hybrid approach to long-term incentives aligned with prevailing market practice among the global consumer companies with which it competes for talent, particularly in its largest market of the US. It said the increase in the PSP opportunity will mean the mix of total compensation determined by long-term performance rises to 68% from 62% previously. It added: “We require a remuneration framework which allows us to attract, retain and motivate the calibre of leaders needed in all our global markets to deliver our turnaround. Since 2014 we have not changed our overall incentive design or increased the opportunity level. As a result, we are no longer competitive in our key markets.”

What about performance measures? Relative TSR will no longer be used due to the challenge of constructing a “robust and appropriate” peer group for long-term incentives. The current group is AB InBev, Heineken, Pernod Ricard, Brown-Forman, Kimberly-Clark, Procter & Gamble, Carlsberg, L'Oréal, Reckitt, The Coca-Cola Company, Mondelēz International, Unilever, Colgate-Palmolive, Nestlé, Danone, PepsiCo. Diageo said: “Spirits businesses are most closely aligned with our core operations, however, two of the four spirits peers are materially smaller and have narrow category and geography exposure. The larger non-alcoholic beverage peers face different industry dynamics. The committee therefore concluded that neither approach - a broad consumer group or a more refined alcoholic beverage group - provides an optimal comparison basis when assessing business performance.” Earnings per share growth (40% weighting), cumulative free cash flow (40%) and adjusted return on invested capital (20%) will be used for the PSP. 

How did last year's AGM go? The annual remuneration report got 89.91% support, while the last binding vote on the remuneration policy at the 2023 AGM got 95.41% backing.

How diverse is the board? The gender split at the end of the financial year was 60% female, including the role of senior independent director. Joanne Wilson is due to join the company as finance chief next year, while Alexandra Keith has been appointed as a non-executive director ahead of the AGM. Four members of the board are from ethnic minority backgrounds.

Hays

When: 12 noon, Wednesday 18 November.

Where: 4th Floor, 107 Cheapside, London EC2V 6DN.

How to participate: Proxy voting instructions should be returned no later than 12 noon, Monday 16 November. More AGM details can be found here.

Who's in the chair? Appointed in 2025, Michael Findlay spent his executive career in corporate broking and investment banking. He is also non-executive chair of London Stock Exchange.

How did the company do in the year to 30 June? Net fees of £905.5 million represented an 8% like-for-like decline on a year earlier. Pre-exceptional operating profit of £48.6 million rose 3% but underlying earnings per share declined 8% to 1.21p. Hays (LSE:HAS) reported strong cash flow and balance sheet position, with year-end net cash of £20.1 million and cash conversion of 189%. An unchanged dividend of 0.29p is due on 26 November, resulting in a 65% decline for the year to 0.44p.

How have shares performed? Down 56% to 31.2p (61.95p on Thursday).

How much was the former boss paid? Dirk Hahn, who stepped down as chief executive on 27 February, got a total of £1.16 million in relation to the 2025/26 financial year. This included a pro-rated annual bonus for the period of £425,000, which was based on 64.9% of the maximum opportunity. The 50% vesting of long-term incentives contributed £199,000.

What about the new boss? Mark Dearnley joined the board in May on a base salary of £650,000, which is unchanged for the current financial year. The maximum value of his remuneration package is £3 million, rising to £3.6 million in the event of 50% share price growth. The annual bonus opportunity is worth up to 150% of his base salary, alongside a grant of long-term incentives equivalent to 200% of salary.

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How was variable pay determined? Group cash conversion of 189% meant a maximum payout result against the 30% of the annual bonus determined by this metric. Adjusted operating profit, which accounts for 50% of the bonus, was marginally above budget for an outturn of 35.8% of the maximum. Personal objectives accounted for the remaining 20% of the annual bonus scorecard. The outcome on long-term incentives was driven entirely by the result in relation to cash conversion, with no vesting for relative total shareholder return (TSR) and cumulative earnings per share over the three year period. The comparator group for TSR was Adecco, Kelly Services, Manpower, Page Group, Randstad Holdings, Robert Half International, Robert Walters and SThree, with Hays below the median.

What's in the new remuneration policy? The only change is a minor adjustment to the operation of the deferred annual bonus scheme to align with evolving market practice. Under the current policy, 50% of any annual bonus is deferred into shares for three years. In future

years, it is proposed that the deferral into shares will reduce from 50% to 20% once an executive director has reached the shareholding requirement.

How did last year's AGM go? The annual remuneration report got 99.98% support, while the remuneration policy was last approved at the 2023 AGM with 93.20% of votes in favour.  

How diverse is the board? The gender split at the end of the financial year was 44% female, including the role of senior independent director. Two members of the board were from minority ethnic backgrounds.

Kier

When: 10am, Thursday 12 November.

Where: Ashurst Perkins Coie, London Fruit & Wool Exchange, 1 Duval Square, London, E1 6PW. 

How to participate: Proxy voting instructions should be returned no later than Tuesday 10 November. More AGM details can be found here.

Who's in the chair? Matthew Lester, who is the former chief financial officer of Royal Mail and held senior finance roles at Diageo, was appointed in January 2020.

How did the company do in the year to 30 June? Adjusted revenues at the infrastructure and construction group rose 7.5% to £4.4 billion and operating profit by 6.7% to £169.8 million. A year-end order book of £11.9 billion grew 8% on a year earlier, while Kier Group (LSE:KIE)'s net cash position of £232.4 million compared with £204.1 million the year before. Adjusted earnings per share (EPS) of 23.5p rose 8.8%. A final dividend of 5.2p is due to be paid on 4 December, resulting in an 8.3% increase in the total for the year to 7.2p.

How have shares performed? Up 4% to 218.2p (288.8p on Thursday).

How much is the boss paid? Former construction division boss Stuart Togwell, who was appointed group CEO in November, got £2 million in relation to 2025/26. This included cash and deferred shares worth £679,000 after the annual bonus scheme paid 72.1% of the maximum opportunity, plus £572,000 from the 84.42% vesting of long-term incentives. His base salary for this year has increased by 3% to £731,300.

And the former boss? Andrew Davies, who served as chief executive for six years and stepped down from the board on 31 October, got a total of £2.7 million. This was driven by £2.1 million from the vesting of long-term incentives granted in 2023, alongside an annual bonus of £293,000. During his tenure, Kier strengthened its financial position and increased its order book to a record of more than £11 billion. The company also returned to the FTSE 250 index and recommenced dividend payments 

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How was variable pay determined? An above-budget increase in adjusted operating profit meant a 55.2% payout for the 40% of the annual bonus determined by this metric. Average month-end net cash, which accounts for another 40%, saw a maximum payout, while safety and strategic objectives made up the rest of the bonus scorecard. Adjusted earnings per share of 23.5p meant 61.06% of maximum vesting for this part of the 2023 long-term incentive scheme. Free cash flow of £206.2 million and an above upper quartile performance for total shareholder return resulted in full vesting for these elements.

What's in the new remuneration policy? There are no material changes to the policy last approved at the 2023 AGM with 38.60% of votes cast against. For those shareholders who did not support the policy three years ago, the primary reasons were the increase in the annual bonus opportunity from 125% to 150% of salary, the formalisation of  regular long term incentive plan awards at 175% of salary and the appropriateness of Kier's benchmarking

peer group. Kier said at the time that the changes were necessary to retain and incentivise the CEO and chief financial officer as they deliver the company's medium-term value creation plan.

How did last year's AGM go? The annual remuneration report was approved with 99.51% of votes in favour.

How diverse is the board? Margaret Hassall’s retirement in May meant female representation on the board reduced to 37.5%, which is below the recommended 40%. Against broader diversity measures, Kier was ranked first in the construction and materials sector in the FTSE Women Leaders Review and rose to 16th place in the FTSE 250 rankings. Ethnic minority representation among senior leadership was 13.6%, exceeding the 13% target set by Kier in response to the Parker Review for achievement by 2027. However, there was no ethnic minority representation on the executive committee at the end of the financial year.

Graeme Evans owns Diageo shares