Pearson hit by shareholder rebellion over new chief's share deal

Educational publisher Pearson faced a significant shareholder rebellion as one-third of its investors voted against its new chief executive's multi-million pound pay packet.

The blue-chip business has received a barrage of criticism in recent weeks over Andy Bird's golden hello, worth $9.3m (£7.2m).

On Friday, a significant chunk of shareholders revolted against the move, but the former Disney executive will receive the payout and take over next month after 67pc of investors backed the proposal.

Some of Mr Bird's pay plan will contribute towards renting a New York apartment for business use. However, he is based in Los Angeles and will continue working there when he takes up the job at Pearson on October 19.

Sidney Taurel, Pearson's chairman, said: "During this process, we have undertaken extensive engagement with our shareholders, in which Andy has been recognised as an outstanding candidate."

The company claimed that the generous pay packet was necessary to "secure" Mr Bird, who previously oversaw a large expansion of Walt Disney International.

It added: "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."

However it acknowledged that "a significant minority" of investors had voted against the "highly competitive remuneration package".

Mr Bird – who was born in Warrington and began his working life answering phones for British radio DJ Timmy Mallett, before helping launch the career of Chris Evans – will get $9.3m of shares after buying $3.75m of stock with his own money. He will be paid a maximum of $7.7m a year.

A media veteran who ran the international arm of Walt Disney, overseeing its transformation into a "digital-first" brand, Mr Bird has no direct experience in education.

However, he has been on Pearson's board since May and helped develop Disney's direct-to-consumer strategy. He will try to steer the firm through the fallout from the Covid-19 pandemic from his LA base almost 5,500 miles from London.

Pearson has suffered a tumultuous four years as the publishing industry has been battered by the rise of online rivals.

Mr Bird will replace John Fallon who cut thousands of jobs, disposed of assets and issued a string of profit warnings in recent years.

Notably under Mr Fallon, Pearson sold off Penguin Random House, the Financial Times and a stake in The Economist.

Shares fell 0.2pc to 503.8p in afternoon trading.