Tandem in row with biggest shareholder over board pay

(Sharecast News) - The maker of Claud Butler and Dawes bicycles is in a battle with its biggest shareholder over how much it pays non-executive directors.
Simon Bragg, who owns almost 11% of Tandem Group, has accused the bikemaker of breaching corporate governance rules by overpaying non-executives for the past nine years.

Bragg has accused the board of chaotic response to his objections and has urged other shareholders to join him in voting against the election of Chairman Mervyn Keene and non-executive Mark Taylor and new articles of association at Tandem's annual general meeting on 25 June.

In a letter to shareholders, Bragg, the former boss of Oriel Securities, said Tandem's articles of association limit non-executive directors' pay to £75,000 a year but that the company has paid more than that every year since 2010. The overpayments, including seven years when directors were paid £90,000, should have been ratified by shareholders, he said.

Tandem said it increased pay for non-executives in 2010 when it had to attract two new directors to the board. The company said the £75,000 limit applied to fees and not "remuneration" and that the increase was approved by shareholders at the time and at each AGM.

Bragg accused Tandem of a "disturbing" or "careless" omission by not disclosing changes to its articles fully or "a deliberate attempt to frustrate proper scrutiny of the proposed changes". He urged shareholders to consider whether Keene and the board had conducted themselves properly before deciding how to vote at the AGM.

"Up until now, I have been supportive of the board at each annual general meeting," Bragg said in his letter. "This year, as a result of the board's lack of transparency and chaotic response to a long-standing breach of the articles of association ... I will be voting against a number of resolutions."

In its response the board accused Bragg of stirring up trouble when the company should be concentrating on surviving the economic turmoil caused by the Covid-19 crisis.

"It is your board's reasonably held view that Mr Bragg is determined to frustrate the company with matters which take up time and incur expenditure of company funds in order to discredit the board of directors and that the statement is the latest iteration of that course of conduct," Tandem said.