Executive pay: IoD attacks 'excessive' BG deal
A proposed £25m pay package for the new head of oil and gas giant BG Group has been branded "excessive" and "inflammatory" by the Institute of Directors (IoD).
Simon Walker, director general of the IoD, said Helge Lund's deal would damage the reputation of UK business.
The IoD acknowledged its criticism was strong, coming from a body whose job is to promote the interests of UK firms.
BG said Mr Lund was being paid a "competitive market package".
Mr Walker said the proposed pay package was " excessive, inflammatory and contrary to the principles of good corporate governance".
Speaking to the BBC, he said: "We think in any terms this £25m pay settlement is grossly excessive, it will inflame public sentiment , it will be a red rag to the critics of capitalism."
Mr Walker added said that the timing of the deal, so close to a general election, could put executive pay on the political agenda.
"It damages the reputation of British business as a whole to behave in this cavalier fashion, that has no regard for strongly held public sentiment... this is six months before a general election, in which you have an opposition that is already campaigning vigorously against big business."
Mr Walker said he was "very keen that shareholders deal with the situation".
Mr Lund's pay will be put to shareholders at a meeting next month. Mr Lund will join BG as its new chief executive in March, having been recruited from Statoil with the award of shares worth £12m and the chance of up to another £13.5m in pay, pension and other benefits if performance targets are hit.
He established his reputation after transforming Norway's Statoil from a national operator into a global company.
But some BG shareholders have voiced concern about the size of the annual pay package being offered by the FTSE 100 company.
The Investment Management Association, a body representing shareholders, issued a "red top" alert - a warning about potential corporate governance breaches.
Mr Walker said the £25m sum was especially excessive given BG's size. Chief executives at the much-larger Royal Dutch Shell and BP have smaller pay packages.
The IoD has raised eyebrows before with criticism of pay and bonus issues at Barclays and Sports Direct. But a spokesman accepted that this BG criticism was its strongest yet of a major company.
BG declined to comment specifically on the IoD's comments. But a spokesman said: "We believe Helge Lund is the right person to lead BG Group. His proposed remuneration is competitive in the international oil and gas industry.
"The shareholder vote on Helge Lund's pay is in line with the letter and spirit of corporate governance legislation."