A third of pearsons shareholders failed to back the pay package of its new chief executive andy bird, a significant revolt against the proposed 7.4m payout for the former disney director.
The ftse 100 publishing company has faced a barrage of criticism for the pay plan which includes a contribution towards the rent of an apartment in new york with three top-20 shareholders telling the financial times they had serious concerns.
Pearson said on friday that 67 per cent of shareholders voted to approve the plan, clearing the way for mr bird to take over next month. the companys board previously warned that he would only take up the role if the pay proposal was approved by shareholders.
The pay package includes a so-called co-investment opportunity, under which the chief executive will be expected to buy pearson shares worth $3.75m by the end of the year, but will receive a total stock award worth $9.38m that will vest in three tranches subject to performance.
Given the unusual nature of the co-investment plan in the uk market, the board very much appreciates the support for the resolution by the majority of shareholders, pearson said. however it noted that a significant minority of investors had voted against the highly competitive remuneration package.
The company added that the pay deal was necessary to secure mr bird, who previously oversaw a large expansion of walt disney international.
Mr bird will replace john fallon, who after almost eight years at the helm will remain at pearson as an adviser until the end of 2020.
Mr fallon announced his plans to retire late last year after a string of profit warnings that have knocked investor confidence in pearson, which is midway through a difficult transition to digital products and services.
Pearsons share price, which has dropped by more than 40 per cent in the past year, remained largely flat following the announcement on friday.
The company has in the past been criticised for awarding mr fallon double-digit pay rises while it continued making losses and was at the centre of one of 2017s biggest shareholder revolts over executive pay in the uk.
The london-listed company has struggled to offset the rapidly shrinking market for textbooks with revenue from its new digital products.
However europes biggest activist investor, cevian capital, has made a bet that pearsons new management will turn round the company, building a 5.4 per cent stake in it this summer.