23
Jun
2018

Sharp spike in director-related concerns at AGM halfway point

Saturday 23rd June 2018

Shareholder concerns over director accountability are on the increase as pay remains high on the agenda at the midway point of the 2018 AGM season, according to new analysis by the Investment Association (IA), the trade body that represents UK investment managers whose 240 members collectively manage more than £6.9 trillion on behalf of clients.

For those FTSE All-Share companies who have held their 2018 AGM before 8th June 2018, the data shows that:

 

  • A total of 94 companies have been added to the Public Register in 2018.
    • The total number of resolutions with more than 20% votes against so far in 2018 is 140 with an additional 14 resolutions having been withdrawn.
  • Of these 94, 34 companies were added to the Public Register due to director-related resolutions, compared to just 21 at this point in 2017, an increase of 62%.
    • The number of individual director-related resolutions with more than 20% votes against rose from 27 in 2017 to 54 in 2018, an increase of 100%.
  • Of these 94, 40 companies were added to the Public Register due to pay related issues, compared with 35 at this point in 2017, an increase of 14%.
    • The number of individual remuneration resolutions with more than 20% votes against fell from 48 in 2017 to 47 in 2018.
  • More than a third (37%) of all the companies added to the Public Register in 2018 also appeared on the Public Register in 2017.
    • There are 28 instances of companies appearing on the Public Register in 2017 and 2018 for the same resolution.

In a sign that the Public Register is effective in driving accountability, 74% of companies added to the Public Register so far in 2018 acknowledged shareholder dissent in their AGM results and spelled out actions they intend to take. Among companies added to the Public Register in 2017, just 55% acknowledged shareholder dissent in their AGM statement.

Andrew Ninian, Director of Stewardship and Corporate Governance at The Investment Association, said:

“The Public Register is shining a spotlight on companies subject to high levels of shareholder rebellion. After only 7 months of operation, the increased scrutiny brought by the Public Register is clearly working, with three quarters of companies acknowledging the shareholder dissent at the time of their AGM, and crucially explaining how they intend to address those concerns. We now expect these companies to follow-up with a further statement within 6 months of their AGM, outlining the actions taken and views heard from their shareholders.

“An emerging trend midway through this year’s AGM season is the increase in directors receiving high votes against their re-election. Directors are getting a very clear message from shareholders that they will be held accountable for their actions. Investors also remain concerned over executive pay. Our members expect these companies to act when challenged over governance issues, including high levels of pay and director accountability.”

-Ends-

Notes to Editors:

About the Public Register:

  • The 2018 figures are based on AGM and GM meetings from 1 January 2018 to 8 June 2018 for companies reporting by 31 December 2017. All comparisons with 2017 are using the same date range.
  • The data for the second wave of AGMs, for companies reporting by 31 March 2018 will be available later this year.
  • The full Public Register is available here: https://www.theinvestmentassociation.org/publicreg...
  • The methodology can be found here: https://www.theinvestmentassociation.org/publicreg...
  • In the Government’s response to the consultation on corporate governance reform, in August 2017, the IA was asked to establish and maintain a Public Register of FTSE All-Share companies which have received more than 20% votes against any resolution, at an AGM or GM. The Public Register will also include any resolutions which were withdrawn by a company prior to the meeting. The main aim of the Public Register is to focus attention on those companies which have received a significant vote against, and to track whether and how they are responding to shareholder concerns. A link to the companies’ response is included alongside their voting data as part of the Public Register.
  • The Public Register includes all resolutions which have been withdrawn. Companies may withdraw a resolution for a variety of reasons including to stem shareholder concern, to more practical circumstances such as the retirement of an executive director.
  • The Public Register will be updated on an ongoing basis throughout the year. It will include a description of the resolution, the result of the shareholder vote, a link to the AGM results announcement (including any statement the company has made under E.2.2 of the UK Corporate Governance Code3) and a link to any further statement the company has made on the actions they have taken since the vote.

For media enquiries:

Anisha Patel, Head of Communications: [email protected]
T +44 (0)20 7269 4635

 

Ben Rathe, Senior Communications Manager: [email protected]
T +44 20 7269 4655

About the Investment Association:

 

  • The IA champions UK asset management, supporting British savers, investors and businesses. Our 240 members manage £6.9 trillion of assets and employ 93,500 people across the UK.
  • Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for
  • the economy, so everyone prospers.
  • Our purpose is to ensure investment managers are in the best possible position to:
    • Build people’s resilience to financial adversity
    • Help people achieve their financial aspirations
    • Enable people to maintain a decent standard of living as they grow older
    • Contribute to economic growth through the efficient allocation of capital.
  • The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
  • The UK is the second largest investment management centre in the world, after the US and manages 37% of all assets managed in Europe.

 

 

For further information, please contact:

For media, to receive the full consultation document, please contact Helen Ayres

Helen Ayres, Communications Manager: [email protected]

T +44 (0)20 7269 4620; M +44 (0)7508 724 066

IA press office: [email protected]

About the Investment Association (IA):

  • The IA champions UK asset management, supporting British savers, investors and businesses. Our 250 members manage £7.7 trillion of assets and the asset management industry supports 100,000 jobs across the UK.
  • Our mission is to make investment better. Better for clients, so they achieve their financial goals. Better for companies, so they get the capital they need to grow. And better for the economy, so everyone prospers.
  • Our purpose is to ensure investment managers are in the best possible position to:
    • Build people’s resilience to financial adversity
    • Help people achieve their financial aspirations
    • Enable people to maintain a decent standard of living as they grow older
    • Contribute to economic growth through the efficient allocation of capital.
  • The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.
  • The UK is the second largest investment management centre in the world, after the US and manages 35% of all assets managed in Europe.