Carlsberg CEO Has His Pay Raise Blocked After Public Criticism

(Bloomberg) -- The chief executive officer of Carlsberg A/S, Cees ’t Hart, is unlikely to get a pay rise this year as the board bows to public pressure to curb remuneration.

Hart, whose total pay jumped 22 percent last year to about $8 million, will essentially have his salary frozen, according to Chairman Flemming Besenbacher. The decision follows criticism in local media.

Carlsberg CEO Has His Pay Raise Blocked After Public Criticism

“Aside from marginal adjustments, we don’t expect to see increases in next year’s report, even if the results continue to be as strong as they’ve been in recent years,” Besenbacher said, according to a transcript of his comments at the annual general meeting on Wednesday.

Claus Wiinblad, the head of equity investments at ATP, said Carlsberg’s habit of paying big salaries “unfortunately increases the risk” that other companies follow suit, which he said would be a step in the wrong direction, according to a transcript of his comments provided by the fund.

Since the 61-year-old Hart became CEO in the middle of 2015, Carlsberg’s share price has risen almost 40 percent, more than double the increase in the benchmark index of Denmark’s most traded stocks. But measured as an annualized total return, Hart has delivered about 11 percent to investors, which is less than the 13 percent that Carlsberg’s peers achieved, according to data compiled by Bloomberg.

Carlsberg CEO Has His Pay Raise Blocked After Public Criticism

Hart’s fixed salary has largely been unchanged since he started, while his cash and share-based bonuses have soared.

“Even though Carlsberg’s management has done a good job to lead the business in the right direction, we still believe that the total payroll for Carlsberg’s management is too high and that the variable portion of the payroll is too big,” Wiinblad said.

Hart has spent his time at Carlsberg cutting debt and reducing costs, which has freed up cash that has underpinned shareholder rewards. Going forward, Besenbacher said Hart’s pay will depend on top-level growth at Carlsberg. Since Hart started, revenue has declined from about 65.4 billion kroner ($9.9 billion) in 2015 to 62.5 billion kroner last year.

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