The chairman of Greencore has said the board will consider its executive remuneration policy after nearly a third of shareholders voted against it at the company's AGM today.
The move follows a call in advance of the meeting from investor advisory firm Institutional Shareholder Services for shareholders to vote against the 35% of salary pension contribution to CEO Patrick Coveney.
The contribution is worth €315,000.
"We engaged very proactively with our shareholders - we contacted about 70% of them and we had dialogue with about 50% so it is good to see that the policy was actually approved," chairman Gary Kennedy told the media after this morning's AGM.
"But there is very definitely a message there. And the direction of travel that is there in terms of the market and in terms of corporate governance arrangements," the Greencore chairman said.
"We will sit back and consider that over the next probably three to four months and we'll take a decision on what needs to happen," he stated.
Mr Kennedy said the size of the vote was an indication of the need to consider the situation.
"I think any time you get less than 80% of the vote you've got to listen to the mood music and we've an obligation anyway to report on what we are going to do once it is less than 80%.
"So we are very cognisant of that and we will be issuing something shortly in terms of that," he added.
Chief executive Patrick Coveney agreed that the company would have to consider the situation further.
"We noted the policy was approved but there is clearly issues for us to reflect upon and that will really be more for Gary to lead rather than me," he said.
Mr Kennedy said the company follows all governance arrangements in respect of renumeration practices, with the only exception last year being the equalisation of executive pension payments to the broader employee mass.
Currently Greencore's general staff population receives average pension contributions of about 8%.
But in the case of Patrick Coveney that contribution is 35%, while its chief financial officer Eoin Tonge receives 25%.
"The direction of travel in the market is that they want to see executive pension contribution rates normalised back to the broader population," Gary Kennedy said.
"You can imagine that is quite a big delta and that is something we are dealing with," he added.
He said the input that the company had received from shareholders was that they would be happy if Greencore froze executive contributions.
But he added that in the last six months the situation has moved on and they now want to see more dramatic alignment of those contribution rates.
Earlier, Mr Kennedy defended the company's performance, saying it had to be taken in the context of the macro environment in which the firm operates.
He said Greencore's customers in the UK have had no significant increase in sales recently, particularly in the food to go sector.
The Greencore chairman said the firm has had to operate in an environment where the UK was being negatively impacted by Brexit.
But Mr Kennedy added that despite this, Greencore is doing better than the market growth and its competitors.
Additional channels to market will be looked at he said, but the company will not become an end customer supplier as it is sticking to its business to business model.
The chairman also defended the time spent by Mr Coveney on the boards of Glanbia and Core Media, saying the Greencore board had no concern about the amount of time Mr Coveney spends running the business as well as thinking about its strategic direction.
He said it is beneficial for Greencore for Mr Coveney to be exposed to other businesses and models.
On Brexit, Mr Kennedy said the company does not now anticipate a hard landing scenario, but had been successfully derisking its ingredients supply chain in the UK by sourcing more local goods.
Earlier, the convenience food group said its group revenue for its fiscal first quarter rose by almost 2% despite a continuing challenging environment.
In a trading statement for the 13 weeks to December 27, Greencore said its group revenue increased by 1.8% to £367.8m.
Revenue at its food to go categories rose by 4.5% to £240.9m, which reflected the impact of the Freshtime acquisition which performed well during the quarter.
But revenues at its other convenience foods categories slipped by 3% to £126.9m due to the ending of longer life ready meals manufacturing at its Kiveton facility.
The Irish-based, London-listed group is the biggest pre-packed sandwich maker in the UK.
Greencore said it has started the year in line with plan and continues to anticipate a year of profitable growth in the full year.
Patrick Coveney, Greencore's chief executive, said the company continues to make good strides in the diverse, attractive and growing UK food to go market.
"Our strategy to drive growth, to deepen customer relevance and to pursue a distinctive and repeatable way of working is well embedded across the business. Following a steady start to 2020, we look forward to delivering a year of profitable growth," Mr Coveney added.
Shares in the company were down over 1% in afternoon trade in London.