Interactive Investor

Have your say: the upcoming AGMs that could get bloody

Shareholders have already flexed their muscles this year, and more potential flashpoints are yet to come.

12th February 2021 15:24

Graeme Evans from interactive investor

Shareholders have already flexed their muscles this year, and more potential flashpoints are yet to come.

Shareholders continue to make their voices heard after magazine publisher Future (LSE:FUTR) became the latest big name company to endure an uncomfortable ride at its annual general meeting (AGM) this week.

More than 35% of votes were against Future's remuneration policy, which included a bonus scheme with the potential to pay £95 million to its 2,300 staff after a period of three years.

Future said the value creation plan, which could see chief executive Zillah Byng-Thorne pick up £40 million, is directly aligned to shareholder interests by incentivising and rewarding exceptional performance across the group.

The separate remuneration report containing a 21% increase in Byng-Thorne's salary to £575,000 saw a 27% vote against, despite it being her first increase after three years of strong sales growth. Future said it will continue to engage with shareholders in the wake of the poll.

Fellow FTSE 250 index stock Euromoney Institutional Investor (LSE:ERM) was also the subject of sizeable votes against its remuneration report and policy this week, with about 15% against on both.

Imperial Brands (LSE:IMB), JD Sports Fashion (LSE:JD.) and Cineworld (LSE:CINE) have already received bloody noses from shareholders over pay packages in recent weeks, showing why AGMs matter.

But it's not just pay where shareholders can hold companies to account. Nowadays, the onus is on all shareholders to be aware of the social impact of their investments.

A vote due to be tabled at the Tesco (LSE:TSCO) AGM in the summer will call for the supermarket to set targets to increase the proportion of healthy products in its sales.

The first health-based shareholder resolution at a FTSE 100 company is being co-ordinated by responsible investment group ShareAction and is being co-filed by seven institutional investors managing more than £140 billion in assets, along with 101 retail investors. 

They note that severely obese people are three times more likely to be admitted to intensive care with Covid-19, highlighting the role of Britain's grocers in shaping our diets.

Another blue-chip AGM with a heightened focus on socially responsible investing will be April's Royal Dutch Shell (LSE:RDSB) meeting, after the oil giant set out plans for net-zero emissions by 2050.

In a first for the oil industry, Shell plans to put the company’s energy transition strategy to an advisory vote every three years and to hold a vote on the progress made each year.

The Anglo-Dutch oil giant aims to build low-carbon businesses of significant scale by the early 2030s, but with upstream operations continuing to deliver vital energy supplies and the cash needed to accelerate the transition to these growth businesses.

The pay of 16,500 staff will be linked to the company's targets, which include lowering net carbon intensity by 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050.

This week's calendar of AGMs and general meetings features a vote on a £134.4 million takeover and an opportunity to hear from star fund manager Nick Train.

Countrywide (15 February)

Shareholders are being asked to approve the sale of the estate agency chain after management agreed a sweetened £134.4 million deal with rival Connells in the final hours of 2020.

The takeover of the business behind brands including Bairstow Eves and Hamptons International will see shareholders receive 395p a share, compared with 145p prior to the company receiving an initial approach from Connells worth 250p a share on 9 November. The shares had been changing hands at more than 3,000p in 2018.

Countrywide (LSE:CWD), which has found itself saddled with too much debt, previously considered an equity raise underwritten by private equity firm Alchemy Partners. Acting chairman David Watson said the Connells proposal “fairly valued the opportunities and risks” of the business and has urged shareholders to support the deal.

It is being completed through a court-approved scheme of arrangement, which to be work needs more than 75% of the value of Countrywide shares to vote in favour. Shareholders should have received the voting paperwork at the start of February.

Revolution Bars (15 February)

Revolution Bars (LSE:RBG) staged its annual general meeting before Christmas, but having delayed its annual results in order to complete a restructuring not all matters were dealt with.

This has meant the company, chaired by Keith Edelman, is holding a special meeting at its Beaconsfield offices to approve the four remaining resolutions, including the directors' remuneration report and the re-appointment of PwC as auditor.

The meeting will focus on just the remaining formal votes without any business update or Q&As, although shareholders are invited to submit questions on specific resolutions.

The delay in publishing the accounts for the year to 27 June came as Revolution sought approval from creditors for a company voluntary arrangement under which six venues were permanently closed and rents reduced at eight other bars. The company now has an estate of 67 outlets under the Revolution and Revolución de Cuba brands.

Revolution shares slumped as low as 9p in November, although they've recovered to 27p since then. That's a far cry from the 203p seen in October 2017, when a majority of shareholders rejected a takeover approach worth more than £100 million from Stonegate Pub Company.

Finsbury Growth & Income Trust (17 February)

The opportunity to hear in person from portfolio manager Nick Train (pictured) should be reason alone for shareholders to engage with this year's virtual AGM.

Train will give a presentation on the past year's extraordinary events, as well as share his views on the stock market outlook and future direction for the Finsbury Growth & Income (LSE:FGT) trust, which boasts investments such as Burberry (LSE:BRBY), Diageo (LSE:DGE) and PZ Cussons (LSE:PZC).

It is now 20 years since Train and business partner Michael Lindsell set up Lindsell Train and took over management of the trust, although the past year has been among the most challenging after net asset value declined by 7.7% in the year to September, compared with a rise of 17.4% the previous year.

With the help of investments in London Stock Exchange (LSE:LSEG), Remy Cointreau (EURONEXT:RCO) and Fevertree Drinks (LSE:FEVR), the performance was still significantly ahead of the FTSE All-Share index and means the return over the past 10 years is 247.4% for a compound annual return of 13.3%.

Shareholders are invited to submit questions to Train and the rest of the board ahead of the meeting, which takes place at noon.

They will also be asked to approve a change to the investment policy so that the company can't invest more than 15% of assets at the time of acquisition in any one issuer, something it adheres to anyway.

Eqtec (17 February)

Trades in EQTEC (LSE:EQT) shares on AIM are currently settled via the CREST system in London, but due to Brexit all Irish securities are having to migrate to Euroclear Bank in Belgium.

Failure to do so by 15 March would remove the Cork-based company's access to electronic trade settlement and threaten its ability to continue trading on the AIM. Shareholders must approve the technical change, which does not alter where the shares are quoted or traded.

Eqtec shares were among the best performing on the AIM last year, having caught the eye in the alternative energy sector by using various waste streams as feedstock to create syngas, which can then be used to generate electricity.

It recently secured planning permission for a waste gasification and power plant at Billingham that has the potential to turn 200,000 tonnes a year of non-recyclable everyday municipal waste into enough green electricity to power 50,000 homes, and 34MW of thermal heat production.

Watkin Jones (19 February)

The student accommodation and Build to Rent specialist Watkin Jones (LSE:WJG) has made no significant changes to remuneration since last year's AGM, when the pay report was carried by 99.97% of votes.

Executive directors have received a workforce-aligned base salary increase, but the annual bonus potential will continue to be capped at 100% of salary and LTIP awards will be granted at normal award levels subject to earnings per share growth and targets linked to shareholder returns.

The company, which joined the AIM in 2016, recorded a resilient performance in 2020 after limiting the fall in adjusted profits to 9.3% at £45.8 million on revenues 5.5% lower at £354.1 million.

The AGM will be webcast, but for shareholders to attend they need to register no later than 10.30am on 17 February. There will be no facility to ask questions live at the AGM, although shareholders are invited to submit questions on any business in advance of the meeting.

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