Reckitt Benckiser, the maker of Nurofen, Dettol, and Vanish, has reduced its chief executive's pay by 39% following a safety scandal in South Korea. Rakesh Kapoor will receive £14 million for 2016, down from £23 million the previous year, after the company withheld his annual bonus and halved his long-term incentive share awards.
The pay cut comes as the consumer goods giant seeks to restore investor confidence after a product safety issue in South Korea linked to humidifier steriliser products. The South Korean government reported that 92 people are believed to have died from lung injuries related to the products, which were sold by several companies including Reckitt. In January, the former head of Reckitt's South Korean business was sentenced to seven years in prison.
Reckitt also announced it would exclude the impact of earnings growth from its impending takeover of Mead Johnson from Kapoor's 2017 incentive plan. The company's decision to slash CEO pay amid ongoing job cuts has sparked backlash from critics who argue that the remuneration remains excessive.
Kapoor was Britain's third highest paid chief executive in 2015, and despite the reduction, his 2016 pay package still amounts to £14 million. The company has not commented on whether further cuts are planned.
