News Column

Shareholder revolts - timeline

July 18, 2014

Julia Kollewe,

The annual meetings of Britain's leading companies have prompted a number of shareholder revolts this summer, including a hat-trick of rebellions against serial boardroom director Sir John Peace, who chairs the three FTSE 100 firms Standard Chartered, fashion retailer Burberry, and credit-checking company Experian.

Although heads have not rolled this year, unlike the "shareholder spring of 2012" when several chief executives were ousted, including the bosses of pharmaceutical firm AstraZeneca and insurer Aviva, there is deeper scrutiny of executive pay after the business secretary, Vince Cable, allowed shareholders a new binding vote on future remuneration for executives last October.

AstraZeneca 24 April

The drugmaker, which has since successfully fended off an unwelcome takeover approach from US rival Pfizer, suffered a big shareholder revolt at its AGM. Around 40% of investors failed to back its remuneration report while 31% refused to support its proposed pay policy for the next three years. Two years ago, the then-boss David Brennan was forced to quit after a row over his 9m pay deal and a long period of worsening performance at the UK's second-biggest pharmaceutical firm.

Barclays 24 April

One in three Barclays investors refused to back its pay plans, in a bloody nose for the bank over its decision to hike bankers' bonuses by 10% despite a 32% fall in profits. Barclays faced a barrage of criticism at an acrimonious AGM and was accused of greed after handing out 2.4bn in bonuses last year. The anger was not restricted to small shareholders: one major City investor, Standard Life Investments, which owns almost 2% of Barclays, spoke out to explain why it had voted against.

Kentz 16 May

The biggest shareholder revolt of the year happened at the AGM of engineering firm Kentz, which was forced to tear up its pay plans after investors rejected them. It was the first time shareholders voted down a company's pay plans. Around 51% of shareholders voted against, 57% including abstentions , while 54% voted against the remuneration report 58% if abstentions are counted.

Standard Chartered 18 May

The emerging markets bank suffered a humiliating rebellion when 41% of investors voted against pay deals for its management team. Investors said the bank failed to consult them properly about new bonuses for the chief executive, Peter Sands, and other top executives.

Morrisons 5 June

The former chairman of the supermarket chain tore into its boss Dalton Philips at Morrisons' AGM. In an extraordinary public tirade which drew loud applause from hundreds of private shareholders Sir Ken Morrison described the chief executive's strategy as "bullshit" and warned that the business founded by his father had been ruined.

Shareholders also registered a significant protest vote against the management team who presided over a 27% fall in the FTSE 100 company's share price in the year leading up to the AGM. The results showed 15.4% voted against Philips's re-election, 12.3% opposed the re-election to the board of the chairman, Sir Ian Gibson, and 26.5% voted against the pay policy.

Tesco 27 June

At a bad tempered shareholder meeting, small investors turned out in force to accuse the management of "arrogance" and having lost shoppers' trust. They pointed to the retailer's worsening financial performance and slumping share price. All the resolutions were passed with little dissent, however. Only 1.14% of votes cast opposed the re-election to the board of Tesco boss Philip Clarke.

Burberry 11 July

The fashion house faced a huge revolt over pay with almost 53% of investors voting against its pay report, after the company handed its new chief executive Christopher Bailey a one-off award of shares worth nearly 15m last year. While the vote was non-binding, Peace, the Burberry chairman, acknowledged that the board would have to "reflect on that and talk to shareholders". Prior to the AGM, a chorus of investor groups including Pirc and the Investment Management Association expressed concerns about Burberry's pay policies.

Icap 16 July

At the interdealer broker run by former Conservative party treasurer Michael Spencer, one in three investors voted against the remuneration report. Investor bodies were concerned about bonuses at the money broker, which was fined 55m in September for rigging Libor. Chairman Charles Gregson responded to concerns by promising to consult them on a "new design of the policy in 2016".

First Group 16 July

The annual meeting of the Aberdeen-based transport company witnessed more than a quarter of shareholders voting against executive pay, including deals for its boss, Tim O'Toole. The rebellion was smaller than the 30% vote against pay last year. The company it would "enagage with investors to seek their views".

Experian 16 July

At the last AGM of Experian, chaired by Peace, who founded the company more than 30 years ago, 30% of investors failed to support the election to the board of his successor, Don Robert (including abstentions). The revolt came after the Institute of Directors warned that Robert's appointment to chairman breached City codes stipulating that chief executives should not jeopardise the independent oversight of the board by stepping up to the crucial role of chairman. Investors said they were frustrated by Peace. One said: "He has a reputation of being difficult and is not helping to foster good relationships between the companies' management and major shareholders."

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Source: Guardian Web

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