Is the CEO of a comparatively small company entitled to the same level of remuneration awarded to the CEO of his large competitor? That issue has stirred up a revolt among minority shareholders of chicken producer Sovereign Foods and spilt over into Wednesday's AGM.Activist shareholder Chris Logan is adamant that the bonuses paid to Sovereign's top executives are unacceptably high. But Logan, who was at the AGM, reckons the remuneration problem goes further than size.story_article_left1It's not just that the top executives at Sovereign, which had a turnover of R1.5-billion in 2015, awarded themselves R29-million in executive fees while executives at Astral, which is six times larger, got R30-million, he said. Equally worrying was that the board changed the formula used to determine the level of awards. This change ensured that Sovereign's top executives received substantial bonuses in financial 2015.Logan said the formula had been changed without informing shareholders and in a manner that was "totally unacceptable". The new formula awarded bonuses to the executives because their earnings margin for the 12 months to February 2015 of 6.7% was ahead of what was achieved by Astral (1.5%) and RCL (2.9%).Logan said he was stunned that Sovereign's large institutional shareholders let the board get away with this sleight of hand. Sovereign's stronger performance was almost entirely attributable to the exceptionally strong festive season, which was excluded from Astral's figures (to September 2014) and partly missed in RCL's figures (to December 2014).Another shareholder, Albie Cilliers, said: "I'm not happy about what happened [with bonus payments] in 2015. I like the company ... but the bonus they awarded themselves in 2015 hasn't been earned yet, maybe in a year or two." Cilliers said Sovereign's strong results in 2015 had nothing to do with management but were due to factors benefiting all industry players. The suspension of US imports over the year-end period was a major boost.story_article_right2Sovereign chairman Charles Davies said the board understood what the minority shareholders "were shouting about" and "getting cross about" at the AGM, adding: "We absolutely accept what they say." But he said the bonuses were justified by performance. "In the last four or five years, the company has faced many challenges. In that period the executives have bedded down the company and got its governance right, they've concentrated on their market position and on expanding."Despite these achievements, the executives had been given no short-term bonuses, said Davies. "If you spread out what they were paid in 2015 over four years, it's not so big."He also noted the importance of ensuring the executive team was not poached. This point was echoed by one of Sovereign's largest institutional shareholders, which said it had voted in favour of the remuneration policy, despite the formula change, because the executives had to be paid a market-related package.But Logan said that over the past four years the executives had been extremely well paid.Analyst Anthony Clark said the perception that "management is bilking the business for their own benefit" may explain the sustained underperformance of the share price of this relatively small company...