AGM alert: Aviva, HSBC, LSE, Anglo American, ITV

A “pay-and-performance mismatch” that means the CEO of London Stock Exchange Group (LSE:LSEG) earns less than some potential US-based recruits will be addressed at the company’s AGM.

The data and analytics group has proposed a new pay deal for David Schwimmer after benchmarking showed rivals are paying more despite being smaller or less complex.

It is also concerned by the compression of the CEO’s pay and senior hires, particularly after losing two key executives in recent months. Schwimmer got a total of £5.1 million last year. 

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Voting advisory group Glass Lewis has recommended shareholders oppose the new remuneration policy, believing a phased approach to increases is preferable.

In other AGMs, HSBC Holdings (LSE:HSBA) shareholders are due to vote on the removal of the two-times bonus cap for material risk takers. Aviva (LSE:AV.) is also in the spotlight after Amanda Blanc got £6.6 million for what the remuneration committee called an “exceptional” performance in 2023.

Aviva

When: 10.30am, Thursday 2 May.

Where: York Racecourse, Knavesmire Road, York YO23 1EX.

How to participate: The AGM venue has been moved out of London in recent years as the company seeks to recognise its connections around the country and give shareholders from different regions a better chance to attend in person. York is a city where Aviva has had a presence for many years as the location for some of its life businesses. The meeting will be available online, with the ability to vote and ask questions. Proxy voting instructions should be returned no later than 10.30am, Tuesday 30 April. More AGM details can be found here.

Who’s in the chair? George Culmer, the former chief financial officer of Lloyds Banking Group, has been in the role since May 2020.

How did the company do in 2023? Operating profit rose 9% to £1.47 billion, with the company’s general insurance businesses in the UK, Ireland and Canada up 35% due to improved investment income and a strong underwriting result. Insurance, Wealth and Retirement operating profit was 17% lower at £994 million, partly due to the impact of the different interest rates used to value assumption changes. The Solvency II shareholder cover ratio of 207% compared with 212% the year before. A final dividend of 22.3p is due to be paid on 23 May, giving a total 8% higher at 33.4p and worth £915 million. Buybacks take total capital returns and dividends to more than £9 billion over the last three years.

How have shares performed? Down 2% in 2023 to 434.7p (459p on Thursday).

How much is the boss paid?  The salary of Amanda Blanc has increased for this year by 3.7% to £1.12 million. Her total remuneration for 2023 rose to £6.6 million, up from £5.5 million the year before and the highest for the chief executive’s role in the past decade. The figure included cash and deferred shares worth £1.9 million after the annual bonus scheme paid 88.1% of the maximum opportunity. The company exceeded targets for the majority of financial measures, with the remuneration committee praising the chief executive’s “exceptional” performance. The 91.8% vesting of long-term incentive shares granted in 2021 contributed £3.5 million to the overall total. This followed a three-year relative total shareholder return performance of 68.5%, compared with an average of 51.2% for peers and 35.5% for the FTSE 100 index.

What’s in the new remuneration policy? The company is proposing only modest changes to the three-year policy, which was last approved at the 2021 AGM with 96.93% of votes in favour. The level of bonus deferral will reduce from two-thirds to half, a change that aligns with the FTSE 100 and Aviva’s closest peers but continues to ensure that a meaningful proportion of any bonus award is deferred into Aviva shares. Blanc’s indicative maximum remuneration, assuming vesting of long-term incentives at maximum and share price appreciation of 50%, is £9.1 million. 

How did last year’s AGM go? The annual remuneration report was approved with 96.82% of votes in favour.

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What’s the view of voting agencies? Glass Lewis recommends shareholders vote in favour of the annual remuneration report and the new three-year remuneration policy.

How’s the company doing on diversity? The representation of women on the board at the end 2023 was 42%, including the roles of chief executive and chief financial officer as well as the chairs of several board committees. The board meets the Parker Review target for all FTSE 100 boards to have at least one director from an ethnic minority background. The percentage of ethnically diverse employees in senior leadership roles was 10.8% compared with 2024’s ambition of 12.5%. Aviva exceeded its target for women to hold 40% of senior management roles, having increased by 6.9 percentage points since the start of 2022 to 40.6%.

HSBC

When: 11am, Friday 3 May.

Where: InterContinental London O2, 1 Waterview Drive, London, SE10 0TW.

How to participate: Facilities will be available to allow shareholders to attend, participate and vote electronically at the AGM and to ask questions in real time. The deadline for proxy voting instructions is 11am, Wednesday 1 May. More AGM details can be found here.

Who’s in the chair? Former Prudential chief executive Mark Tucker has held the role since October 2017.

How did the company do in 2023? Revenues increased by 30% to $66.1 billion (£52.3 billion), reflecting the strength of the balance sheet in a higher interest rate environment. Pre-tax profits of $30.3 billion were 78% higher, including a favourable year-on-year impact of $2.5 billion following the sale of retail banking operations in France. The CET1 capital ratio of 14.8% rose 0.6 percentage points as capital generation was partly offset by dividends and buy-backs. A fourth interim dividend of 31 US cents a share (24.52p) is due to be paid on 25 April, resulting in the highest annual total since 2008 of 61 cents a share. It also announced share buybacks totalling $7 billion in 2023.

How have shares performed? Up 23% in 2023 to 635.5p (646.2p on Thursday).

How much is the boss paid? Noel Quinn’s base salary for this year is up by 3% to £1.38 million, with an unchanged fixed pay allowance of £1.7 million. His single figure of remuneration for 2023 amounted to £10.6 million, the highest of the past decade for the company’s chief executive and a big jump on 2022’s £5.5 million as Quinn’s long-term incentives vested for the first time. They contributed £5.19 million to the overall figure based on a vesting outcome of 75%, which reflected HSBC’s improved performance, shareholder returns and share price over the 2021 to 2023 period. He received cash and deferred shares of £2.02 million after the annual bonus scheme paid 70% of the maximum opportunity. The scorecard outcome was subject to a 7.5% downward adjustment following January’s £57 million fine by the Prudential Regulation Authority for UK deposit protection failings.

What was the bonus pool for 2023? This amounted to $3.77 billion, 12% higher than a year earlier. The remuneration committee considered the margins impact of higher interest rates and lowered the total pool in line with its countercyclical funding approach. The total pay and benefits for the median employee for 2023 was £63,000, an 8.1% increase compared with 2022.

How is the company responding to changes in bonus cap regulations? This year’s AGM will ask shareholders to approve the removal of the current cap on variable pay for material risk takers of two times fixed pay and to permit the remuneration committee to set an appropriate cap where regulations allow. HSBC said: “This will be particularly important in markets outside the EU where we compete with other international banks who do not have to comply with a cap on variable pay.” It has also begun discussions with institutional shareholders and proxy advisory bodies ahead of the renewal of the directors' remuneration policy in 2025. The annual report said: “Over several years, the committee has expressed concerns around the competitiveness of the executive director remuneration opportunity and indicated that our preference would be to operate a policy with a higher proportion of the package based on variable pay linked to performance.”

How did last year’s AGM go? The annual remuneration report got 79.75% of votes in favour after the company’s largest shareholder went against the company on a number of resolutions. A shareholder requisitioned resolution calling for HSBC to devise, implement and report quarterly on structural reforms of the bank, including an Asia spin-off, was defeated.

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What’s the view of voting agencies? Glass Lewis recommends shareholders vote in favour of the annual remuneration report and the change in the maximum variable pay ratio.

How’s the company doing on diversity? At the end of 2023, the board had 47% female representation. Ann Godbehere’s appointment as senior independent director following the AGM will mean the company achieves the FTSE Women Leaders Review target that at least one of the senior board positions is held by a woman. The board continues to exceed the Parker Review target of having at least one director of ethnic heritage.

London Stock Exchange

When: 10.30am, Thursday 25 April.

Where: 87 Barts Close, 87 Bartholomew Close, London EC1A 7EB.

How to participate: Proxy voting instructions should be returned no later than 10.30am, Tuesday 23 April. More AGM details can be found here.

Who’s in the chair? Former Experian chairman and chief executive Don Robert has held the role since May 2019.

How did the company do in 2023? Total income rose towards the upper end of the 6%-8% guidance range, with broad-based growth across data and analytics, capital markets and post trade. Adjusted operating profits of £2.86 billion rose 7.9% on a constant currency basis, with earnings per share up 1.9% to 323.9p. A final dividend of 79.3p a share is due to be paid on 22 May, increasing the total for the year by 7.5% to 115p.

How have shares performed? Up 30% to 9,274p (9,264p on Thursday).

How much was the boss paid last year? David Schwimmer’s total remuneration for 2023 amounted to £5.1 million, including his base salary of £1 million. Cash and deferred shares generated £1.58 million after the annual bonus scheme paid 70% of the maximum opportunity. The 60% vesting of long-term incentive shares granted in 2021 contributed £1.8 million. This was entirely achieved through average adjusted earnings per share as the performance measure for relative total shareholder return over the three years to 2023 was not met.

How is his pay changing? The remuneration committee plans to increase Schwimmer’s salary for this year to £1.37 million. Under the company’s new proposed three-year remuneration policy the maximum bonus opportunity is set to increase from 225% to 300% of salary and the long-term incentive opportunity from 300% to 550%. The maximum overall opportunity, which assumes a 50% increase in share price on the three-year long-term incentive awards, is £17.2 million. To achieve maximum vesting under the scheme an incremental £1.1 billion adjusted operating profit would be required in 2026, equivalent to incremental income in the region of £2.05 billion relative to 2023. It also expects that the required range for adjusted earnings per share will be one of the highest, if not the highest, in the FTSE 30.

What’s the company say about the changes? It points to a “pay-and-performance mismatch”, having carried out a benchmarking exercise against 14 of LSEG’s peers including Nasdaq, RELX and FactSet. The remuneration committee also highlighted the pay compression between its CEO and other recent senior hires. This is particularly the case recruiting US-based talent, with many candidates having existing pay levels that are higher than Schwimmer’s. An example includes the boss of US subsidiary Tradeweb, even though it has approximately one-third of the market value of LSEG. The committee also noted the recent departures of finance boss Anna Manz to join a global Swiss-based company and chief operating officer David Shalders, who will join a private equity backed financial services company at the end of this year.

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What’s the view of voting agencies? Glass Lewis supports the annual remuneration report but not the new three-year remuneration policy. It questions the scale of the proposed increases for the CEO, with his total opportunity more than doubling under the proposed policy. The agency added: “While the company is significantly exposed to the US market, the CEO is currently UK-based and, in a UK context, his available remuneration is already significant. Glass Lewis would also generally prefer to see increases of this nature phased over a number of years which, in and of itself, may provide an additional retention factor.”

How did last year’s AGM go? The binding vote on the remuneration policy was passed with 97.49% support. The annual remuneration report got 98.60%. 

How’s the company doing on diversity? Two of the board’s directors are from a minority ethnic background. At the end of 2023, the board was over 40% female but last month’s arrival of new finance chief Michel-Alain Proch means this has dropped back below 40%.

Anglo American

When: 11am, Tuesday 30 April.

Where: The Mermaid London, Puddle Dock, London EC4V 3DB.

How to participate: The meeting will be broadcast via the Lumi platform. Questions relating to the Anglo American (LSE:AAL) AGM resolutions can be raised or submitted before and during the meeting both in person and virtually. For the first time, the company will also facilitate questions being asked and responded to in Portuguese and Spanish. The deadline for proxy voting instructions is 11am, Friday 26 April. More AGM details can be found here.

Who’s in the chair? Stuart Chalmers, whose executive career included 13 years at Pilkington and its subsequent parent company Nippon Sheet Glass, has held the role since November 2017. He served as chairman of Travis Perkins from 2017 to 2021 and previously chaired Arm Holdings and Rexam. 

How did the company do in 2023? Revenues were 13% lower at $30.65 billion (£24.2 billion) while underlying earnings of $10 billion (£7.9 billion) were down 31%. This reflected a 13% lower product basket price and a 4% unit cost increase, offset by 2% volume growth. The $1.2 billion (£950 million) total dividend for 2023 is equal to 96 US cents a share, a fall of 52% on a year earlier. The final dividend of 41 US cents is due for payment on 3 May. 

How have shares performed? Down 39% to 1,970.6p (2,118p on Thursday).

How much is the boss paid? Duncan Wanblad’s salary for this year has increased 4% to £1.35 million. His total remuneration for 2023 amounted to £3.6 million, down from £4.4 million the year before and the £11.9 million received by predecessor Mark Cutifani in 2021. The total figure for 2023 included cash and shares worth £1.05 million, which is based on 38.3% of the maximum opportunity. The financial element of the bonus generated 5.5% out of a possible 50% while the remuneration committee made a 15% reduction to the overall outturn after a total of three fatalities at the company’s managed operations in South Africa and Chile. The 40.3% vesting of long-term incentives granted in 2021 contributed £738,000 to the overall figure.

What’s the view of voting agencies? Glass Lewis recommends shareholders vote in favour of the annual remuneration report.

How did last year’s AGM go? The new three-year remuneration policy was passed with 95.92% support, while the annual remuneration report got 94.57%.

How’s the company doing on diversity? Four of the 10 directors on the board are female and two identify as minority ethnic.

ITV

When: 11am, Thursday 2 May.

Where: Maynard Suite at The King’s Fund, No. 11 Cavendish Square, London W1G 0AN.

How to participate: Proxy voting instructions should be returned no later than 11am, Tuesday 30 April. More AGM details can be found here.

Who’s in the chair? Former InterContinental Hotels chief executive Andrew Cosslett was appointed at ITV (LSE:ITV) in June 2022.

How did the company do in 2023? Total revenues of £4.26 billion were 2% lower and included a record performance in ITV Studios. Adjusted earnings fell 32% to £489 million, reflecting the decline in linear advertising revenue and previously guided investment in streaming platform ITVX. Adjusted earnings per share fell by 41% to 7.8p. A final dividend of 3.3p is due to be paid on 23 May, giving an unchanged total for the year of 5p a share worth £201 million.

How have shares performed? Down 15% in 2023 to 63.3p (70.5p on Thursday).

How much is the boss paid? Carolyn McCall’s base salary has increased for this year by 3% to £1.05 million. Her total remuneration in 2023 amounted to £2.9 million, down from £3.7 million the year before and including cash and shares worth £1.03 million based on 56.41% of the maximum bonus opportunity. Seventy percent of the bonus is measured against earnings and cash conversion, with the balance focused on individual and strategic goals and environmental, social and governance measures. The latter includes carbon footprint goals and annual targets for diversity on and off‐screen. Shares awarded in 2021 under the ITV Executive Share Plan, which reduced grant levels by 50% compared to the previous annual long-term incentive scheme, vested in full and contributed £736,000 to the final figure. The shares are subject to a two-year holding period as well as performance underpins.

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What’s in the new remuneration policy? The previous document, which was approved at the 2021 AGM with 92.23% of votes in favour, is being rolled forward with only minor amendments. The remuneration committee believes the current structure continues to support strategic goals and “enables the business to remain agile in a dynamic and cyclical sector where viewer behaviours continue to evolve”.

How did last year’s AGM go? The annual remuneration report received 88.23% of votes in favour.

What’s the view of voting agencies? Glass Lewis supports the annual remuneration report and the new three-year remuneration policy.

How’s the company doing on diversity? Gender and ethnic diversity representation on the board is 45.45% and 18.2% respectively.