May 2, 2018 / 6:47 AM / a year ago

Inmarsat defeated by shareholders over executive pay

LONDON (Reuters) - Investors in Inmarsat (ISA.L) voted against the British satellite firm’s remuneration report as they made clear their unhappiness at executive rewards for a year in which the company’s shares fell 35 percent.

FILE PHOTO: Member of staff at satellite communications company Inmarsat point to a section of the screen showing the southern Indian Ocean to the west of Australia, at their headquarters in London, Britain, March 25, 2014. REUTERS/Andrew Winning/File Photo

Some 58.5 percent of shares voted opposed the report in a non-binding vote at the company’s AGM on Wednesday.

Chairman Andrew Sukawaty said he recognised that shareholders had concerns, and he would consult with them further before next year’s annual general meeting.

A new remuneration policy would be put forward for shareholder approval at next year’s AGM, he said.

Chief Executive Rupert Pearce was paid 1.88 million pounds in 2017, according to its annual report.

His payout was down on the 2.35 million pounds he received in 2016, in part reflecting the fall in the share price, remuneration committee chairman Simon Bax said in the report.

Earlier on Wednesday, the company said growing demand for wifi on flights helped it get 2018 off to a good start, sending its shares up as much as 10 percent.

Inmarsat, which provides communications for shipping, aircraft and for governments, reported a 5 percent rise in first-quarter revenue to $345.4 million.

Core earnings slipped 4.5 percent to $174.9 million, which the company said reflected less government work in the quarter.

Pearce said it was a solid start to the year, with Inmarsat’s core maritime operations and its fast-growing aviation services both performing well.

“We are seeing a predictable pattern start to develop here,” he told Reuters in a phone interview after the results.

“Overall 5 percent revenue growth is I think a good performance during tough market conditions.”

Pearce said the company was performing particularly well in aviation, driven by in-flight connectivity for commercial airlines. The number of aircraft with its Global Xpress service installed rose to 245 at the end of the first quarter, from 194 at the end of last year.

“The in-flight connectivity business Ebitda (earnings before interest, tax, depreciation and amortisation) is now close to break even and operating free cash is improving significantly - that is something investors have been concerned about,” Pearce said.

Inmarsat said in March it would not slow investment in in-flight connectivity, despite some risks to cash flow from a separate contract with a U.S. company that uses its airwaves.

The company kept its outlook, targeting mid-single digit revenue growth on average over the next five years, unchanged from March.

Editing by Susan Fenton and Adrian Croft

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