AGM alert: Diageo chiefs prepare for grilling 

The Diageo (LSE:DGE) AGM is set to be a sober affair as shareholders reflect on a three-year performance that has placed the drinks giant among the worst in its peer group.

The Guinness and Smirnoff business has a reputation as a quality stock for the long term, although the past financial year saw a 24% decline in total shareholder return.

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Diageo’s return across three years placed it 14th in a 16-strong peer group of drinks and consumer goods companies that included Anheuser-Busch InBev SA/NV (EURONEXT:ABI), Procter & Gamble Co (NYSE:PG) and Carlsberg.

The below threshold performance, which followed a 28.1% share price reverse since 2021, had a bearing on pay as chief executive Debra Crew got a total of £3.1 million for 2023/24.

Diageo

When: 2.30 pm, Thursday, 26 September.

Where: Hilton London Tower Bridge, 5 More London Place, Tooley Street, London, SE1 2BY.

How to participate: Those attending electronically will be able to participate in the AGM, submit questions and vote on resolutions via a webcast using the Lumi platform. The deadline for proxy voting is 2.30pm, Tuesday 24 September. More AGM details can be found here.

Who’s in the chair? Former Bacardi boss Javier Ferrán plans to retire in February as he approaches nine years on the board. John Manzoni, who became a non-executive director in October 2020, will replace him. He is former chief executive of the UK Civil Service and currently chair of energy business SSE.

How did the company do in the year to 30 June? The Guinness, Tanqueray and Johnnie Walker business reported a 0.6% decline in organic net sales, reflecting a materially weaker performance in Latin America and the Caribbean. Excluding this region, the figure rose 1.8%. 

Operating profit declined by 4.8% on an organic basis to $6 billion (£4.6 billion), while earnings per share fell 9% to 173.2 US cents (132.18p). A final dividend of 62.98 cents (48.07p) a share is due on 17 October, resulting in a 5% increase in the total for the year to 103.48 cents (78.97p)

How have shares performed? Down 26% to 2489.5p (2,430.5p on Thursday).Total shareholder return fell 24% in the financial year but is up by 6% across ten years.

What’s the company say about its performance? Ferrán said the industry remains an exciting sector, having delivered a 4.4% annual compound annual growth rate over the past decade. He added: “We are confident in the long term trend of sector premiumisation and we believe that it will continue, supported by demographic trends, rising incomes in developing markets and spirits continuing to take share from beer and wine.” Diageo has an ambition to increase its industry share to 6% by 2030, up from 4.5% currently.

How much is the boss paid? Debra Crew’s base salary for the new financial year has increased by 4.25% to $1.8 million (£1.37 million). Her total remuneration amounted to $3.86 million (£3.1 million), which included cash and deferred shares worth $868,000 (£690,000) after the annual bonus scheme paid 24.8% of the maximum opportunity. The 58.9% vesting of long-term incentives contributed $852,000 (£678,000) to the overall figure.

How was variable pay determined? The annual bonus outcomes relating to net sales and operating profit were below threshold but operating cash conversion was close to target. On long-term incentives, free cash flow of $9.8 billion (£7.5 billion) and a total shareholder return position of 14th in Diageo’s peer group came in below the required threshold. The overall outcome was driven by a strong performance in the early part of the three-year period on compound annual net sales growth and a pre-tax profit figure just above the threshold.

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How did last year’s AGM go? The new three-year remuneration policy was approved with 95.41% of votes in favour, while the annual remuneration report got 95.51% support.

How’s the company doing on diversity? The gender split of the board at the end of the financial year was 70% female, including in three senior roles. Since then, Lavanya Chandrashekar has stepped down from the board, with her role as chief financial officer taken by Nik Jhangiani. The company exceeds the requirements of the Parker Review to have at least one director from an ethnic minority background.

Frasers Group

When: 9am, Wednesday 18 September.

Where: Auditorium, Unit D, Brook Park East, Shirebrook, NG20 8RY.

How to participate: Proxy voting forms need to be returned no later than 9am, Monday 16 September. More details about Frasers Group (LSE:FRAS)'s AGM can be found here.

Who’s in the chair? Former Nike director David Daly, who was appointed to the board in 2017.

How did the company do in the year to 28 April? The retail group, which started with one store in 1982, generated revenues of £5.54 billion from 1,551 outlets. Retail sales declined 1.3% in the year as a strong performance by the core Sports Direct business offset weaker trading at Game UK and Studio Retail, House of Fraser store closures and a softer luxury goods market. Adjusted profit of £544.8 million rose 13.1%, with earnings per share up 33.6% to 95.8p a share.

How have shares performed? Up 4% to 796p (843.5p on Thursday).

How much is the boss paid? Michael Murray, who was appointed in May 2022, waived his £1 million salary for the 2022/23 and 2023/24 financial years and has done so again for the current year. This in order to focus on the targets of the Executive Share Scheme, under which he has been granted 6.7 million shares that will vest after four years dependent on a share price of £15 for at least 30 consecutive trading days and a profit target of £500 million. Murray, one of the youngest bosses in the FTSE 350, is eligible for an annual bonus worth up to 200% of salary.

What’s in the new remuneration policy? The company intends to roll forward the current remuneration policy, which was approved at the 2021 AGM with 84.92% of votes in favour. The structure is the same with no material changes.

How did last year’s AGM go? The annual remuneration report was approved with 99.38% votes in favour, compared with the previous year’s 87.77%.

How’s the company doing on diversity? The board had four female directors at the end of the financial year, none of them in senior roles. The recent appointment of Jon Thompson, the former chief executive of the Financial Reporting Council,  has reduced the gender split to below the recommended 40%. The company meets  the Parker Review requirement to have at least one director from an ethnic minority background.

International Distribution Services

When: 11am, Wednesday 25 September.

Where: Newbury Racecourse, Newbury, Berkshire, RG14 7NZ.

How to participate: Shareholders attending electronically will be able to see and hear the directors, ask questions and vote in real time. Proxy voting instructions should be returned no later than 11am, Monday 23 September. More details about International Distribution Services (LSE:IDS)'s AGM can be found here.

Who’s in the chair? Former British Airways chief executive Keith Williams joined the IDS board in 2018 and served as interim executive chair in 2020/21.

How did the company do in the 53 weeks to 31 March? Group revenues rose £635 million to £12.7 billion, including the impact of the 53rd week in Royal Mail of £140 million. The delivery firm’s revenues rose by 3.8% on an underlying basis and the logistics arm GLS by 4.6%. Operating profit of £26 million compared with the previous year’s loss of £742 million. The group reported an improved cash position and better quality of service, enabling the business to achieve its best peak operational performance for four years over the Christmas period. The board has recommended a final dividend of 2p a share for payment on 30 September. 

What’s happening with the takeover? In May, the board of IDS recommended that shareholders accept a 360p a share bid by Daniel Kretinsky’s EP Group. An 8p a share special dividend will be paid following the deal’s completion. The offer is subject to regulatory approvals and the acceptances of 75% of all the shares in issue, which includes the 27.6% already held by Krentinsky’s investment vehicle. The bid timetable is currently suspended pending Government scrutiny, although the offer remains open for acceptance.

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How have shares performed? Up 2% to 229.3p (345p on Thursday).

How much is the boss paid? Martin Seidenberg, who was appointed group chief executive in August 2023, has seen his salary for the current year increase by 2% to £714,000. The former head of the company’s GLS logistics division got total remuneration for the year of £1.5 million. 

This included an annual bonus of £762,000, which was based on 76% of the maximum opportunity. Long-term incentives granted in 2021 lapsed in full. Former chief financial officer Mick Jeavons, who left the group at the end of May, received an annual bonus of £398,000 as part of his total remuneration for the year of £804,000.

What’s in the new remuneration policy? This was last approved by shareholders at the 2023 AGM with 97.88% of votes in favour.  The company is planning to increase the maximum normal long-term incentive award from 150% to 200% of salary. The current intention is that this would only apply to the group CEO as it looks to provide a more appropriate incentive to successfully lead the company “through the current challenges and deliver on the opportunities available to both GLS and Royal Mail.”

How did last year’s AGM go? The annual remuneration report was approved with 99.18% of votes in favour.

How’s the company doing on diversity? The board’s gender split is 40% female, including in one senior role. There is one director from an ethnic minority background.