Pearson CEO, CFO Won't Get Pay Rise for Second Year

By Ian Walker

LONDON--Pearson PLC (PSON.LN) won't be giving Chief Executive John Fallon or Chief Financial Officer Coram Williams a pay rise in 2017, for the second year in a row, and they will both have their annual incentive plan funding lowered, according to the company's annual accounts published Friday.

The education publishing company said that while the CEO's pay was "substantially" behind the market standard, the remuneration committee concluded this wasn't relevant in the current trading environment.

In February, the company reported posted a pretax loss for 2016 and a 12% fall in its headline operating profit, which was at the lower end of guidance. Trading was hit by a fall in its biggest market, U.S. higher education courseware.

Mr. Fallon's AIP funding has been cut to 44% of base salary from 55%, while Mr. Williams' has been lowered to 37% from 47%, Pearson's remuneration committee chairman, Elizabeth Corley, said.

"In the current trading environment the committee has exercised its discretion to reduce incentive payment payouts. We remain focused on the need to reflect on shareholder experience in compensation decisions, while at the same time recognising when there is genuinely strong delivery against stretching and demanding performance targets," Ms. Corley said.

"Pearson is undergoing substantial change as the company delivers on digital transformation and continuously improving efficiency, while at the same time meeting the needs of all our stakeholders. This requires strong and resilient leadership and our policy proposals are designed to provide the appropriate balance of reward for performance and accountability," she added.

For the year ended Dec. 31, Pearson made a pretax loss of 2.56 billion pounds ($3.2 billion), compared with a loss of GBP433 million in 2015. Revenue rose to GBP4.55 billion from GBP4.47 billion, but fell 8% in underlying terms.

Adjusted operating profit, which strips out exceptional and other one-off items, fell to GBP635 million from GBP672 million in 2015.

-Write to Ian Walker at [e-mail]; @IanWalk40289749

(END) Dow Jones Newswires

March 24, 2017 09:41 ET (13:41 GMT)

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