Interactive Investor

Victory for shareholders after rethink at popular FTSE 250 firm

13th January 2023 08:56

by Graeme Evans from interactive investor

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A revolt last year by angry shareholders will not be repeated in 2023. Our City writer explains why and also reveals what other CEO’s are getting paid right now.  

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A protest by Britvic (LSE:BVIC) shareholders over the use of discretion on long-term incentives appears to have been successful after the drinks company opted against doing the same this year.

Around a third of votes went against last year’s remuneration report after a Covid-related adjustment meant boss Simon Litherland secured £624,200 from incentives granted in 2018.

Although the company said this outcome was in keeping with corporate performance, it has declined to do so again in order to offset the continued impact of Covid. It means that Litherland got around £164,400 from shares granted in 2019, part of an overall pay package worth £1.9 million in 2021/22.

Britvic

When: 11am, Thursday 26 January.

Where: Linklaters, One Silk Street, London EC2Y 8HQ.

How to participate: Proxy voting instructions must be returned by no later than 11am, Tuesday 24 January. More AGM details can be found here.

Who’s in the chair? John Daly, the former chief operating officer of British American Tobacco, has been in the role since 2017 and on the board since January 2015. He is due to step down as chair in summer and will be replaced by Ian Durant, who has many years of experience in consumer facing businesses and in retail.

How did the company do in the year to 30 September? Revenues increased 15.2% to £1.62 billion, driven by both price and volume. Post-tax profits were 45.3% higher at £140.2 million and adjusted earnings per share rose 29.3p to 57.3p. Free cash flow generation of £128.8 million enabled debt reduction and £106 million to be returned to shareholders through dividends and share buybacks. A final dividend of 21.2p a share for payment on 8 February results in a full-year increase of 19.8% to 29p as part of a 50% pay-out ratio.

How have shares performed? Down 19% to 717.5p (771p on Thursday).

How much is the boss paid? Simon Litherland, who has been chief executive since 2013, received a 4% increase in basic salary in January to £702,554. The majority of the workforce got a 7% rise. His total remuneration for 2021/22 came to £1.93 million and included £911,800 after the annual bonus scheme paid 77.6% of the maximum opportunity. The impact of Covid on the company’s compound earnings performance meant long-term incentives granted in 2019 vested at 19.3% of total, generating £164,400. Unlike in 2020/21, the company did not apply discretion to the vesting of long-term incentives.

How did last year’s AGM go? Almost 32% of votes were cast against the annual remuneration report, reflecting concern about the Covid-related adjustment of vesting outcomes that meant Litherland generated £624,200 from incentives granted in 2018. Britvic said in this year’s annual report: “The vesting outcome was not excessive and better represented corporate performance and the contribution of the executive team.”

What’s the view of voting agencies? Glass Lewis says shareholders can be satisfied with the company’s response to the dissent at last year’s AGM. It recommends they vote in favour of the annual remuneration report.

How’s the company doing on diversity? Britvic meets the diversity targets set in the Listing Rules with over 40% of directors being women, one of the senior board positions being held by a woman and one member being from a minority ethnic background.  The company is committed to gender balance in leadership by 2025.

Avon Protection

When: 10.30am, Friday 27 January.

Where: Hampton Park West, Semington Road, Melksham, Wiltshire, SN12 6NB.

How to participate: Voting instructions must be received no later than 10.30am, Wednesday 25 January. A notice of the meeting and an explanation of the resolutions can be found on pages 172 to 176 of the Avon Protection (LSE:AVON) annual report.

Who’s in the chair? Bruce Thompson, the former boss of FTSE 250-listed Diploma, joined the board in 2020 and has been in temporary charge as executive chair since October. He is due to revert back to his original non-executive duties from next week. 

How did the company do in the year to 30 September? Revenues were 9.1% higher at $271.9 million (£224.8 million) but adjusted profits dropped 74.4% to $6.1 million (£5 million) after the defence firm’s margin weakened to 9.4% from 15.1% previously. Adjusted earnings per share fell to 20.4 US cents (16.87p) from 60.6 cents the year before. An unchanged final dividend of 30.6 cents (25.3p) will be paid in sterling on 10 March, giving a total dividend of 44.9 cents (37.13p), in line with last year. 

How have shares performed? Down 41% to 1,124p (1,082p on Thursday).

How much is the boss paid? Jos Sclater, who starts as chief executive on Monday, is on a starting salary of £526,594. The former finance director at Ultra Electronics replaces Paul McDonald, who stepped down as chief executive in September after five years in the role and more than 19 years with the company. He was on a salary of £513,000. As a good leaver, McDonald is entitled to receive his bonus for the 2021/22 financial year of 44.3% of the maximum opportunity, amounting to £285,000. The 2019/20 long-term incentive plan did not vest as the performance criteria were not achieved. Chief financial officer Rich Cashin, who started the role in March, got an annual bonus of £106,000 but Bruce Thompson has not received any additional fees for running the business on a stand-in basis since October.

How did last year’s AGM go? The annual remuneration report was approved with 99.16% of votes in favour, compared with more than 20% of votes going against the previous year.

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

How’s the company doing on diversity? Two of the five board roles are held by women. Female representation across the executive team and direct reports is 21%, which the company is committed to improving.

Auction Technology Group

When: 2pm, Thursday 26 January.

Where: Travers Smith, 10 Snow Hill, London EC1A 2AL.

How to participate: A live webcast of the Auction Technology Group (LSE:ATG) meeting will be available. Written questions may be submitted via the electronic platform during the webcast or they can be submitted in advance to investorrelations@auctiontechnologygroup.com. Shareholders joining the live webcast will not be able to vote on the day and should remember to submit proxy voting forms no later than 2pm, Tuesday 24 January. More AGM details can be found here.

Who’s in the chair? Breon Corcoran joined ATG as chairman in 2020. He was chief executive at Paddy Power Betfair prior to joining money transfer service WorldRemit in 2018.

How did the company do in the year to 30 September? Revenues of £119.8 million were up 11% on a proforma basis, rising to 71% when including newly acquired LiveAuctioneers and foreign exchange benefits. Total hammer value rose 22% to £10.1 billion. Adjusted earnings improved 70% to £54 million and pre-tax profits of £9.3 million compared with a loss of £25 million the previous year, when the bottom-line was hit by IPO and acquisition costs. No dividends have been paid in order to retain earnings to finance investments.

How have shares performed? Down 46% to 712p (754p on Thursday).

How much is the boss paid? The salary of chief executive John-Paul Savant rose by 3% in October to £450,833. Total remuneration for 2021/22 came to £827,000, including cash and shares worth £353,000 as the annual bonus scheme paid 64.5% of the maximum opportunity.

How did last year’s AGM go? The three-year remuneration policy was adopted with more than 99% of votes in favour, with the annual remuneration report getting similar support.

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

How’s the company doing on diversity? Three women account for 37.5% of boardroom roles. The company aims to improve this to 40% or more by the end of 2025 and for women to hold at least one of the positions of chair, CEO, CFO or senior independent director. It says it complies with the Parker Review recommendation for all FTSE 250 boards to have at least one director from an ethnically diverse background by 2024.

Marston’s

When: 10am, Tuesday 24 January.

Where: The Farmhouse at Mackworth, 60 Ashbourne Road, Derby DE22 4LY.

How to participate: The deadline for proxy voting instruction and the submission of questions for Marston's (LSE:MARS) AGM is 10am, Friday 20 January. More AGM details can be found here.

Who’s in the chair? William Rucker was appointed in October 2018. He has many years’ experience in banking and financial services and is also chair of Lazard UK.

How did the company do in the year to 1 October? The operator of 1,468 pubs increased revenues by 99% to £799.6 million, with like-for-like sales almost back to the pre-pandemic level seen in 2019 despite Omicron disruption to trading in Christmas 2021. An underlying profit of £27.7 million compared with a loss of £101.3 million the year before, and the company reported net cash inflows of £26.2 million. There was no dividend payment.

How have shares performed? Down 58% to 35.6p (42.1p on Thursday).

How much is the boss paid? The salary of Andrew Andrea has been increased by 3% for the new financial year to £620,626. His total remuneration for 2021/22 came to £791,914, which included an annual bonus worth £84,357 based on 14% of the normal maximum opportunity. Long-term incentives granted in 2019 amounted to £64,971 of this final figure after the company’s free cash flow performance led to a 40% vesting of shares.

What’s in the new remuneration policy? Changes include an increase to the maximum bonus opportunity from 100% to 125% of salary. In the current climate, however, Marston’s said it will continue to operate the bonus at a 100% maximum level for at least the first year.  There are no changes to the long-term incentive plan’s normal maximum grant limit of 150%.

How did last year’s AGM go? The annual remuneration report was approved with 95.90% of votes in favour.

What’s the view of voting agencies? On the remuneration policy, Glass Lewis says the overall opportunity is reasonable relative to peers. It also welcomes a three-year deferral on a third of any bonus earned, which it believes further aligns the interests of executives with those of shareholders. The agency recommends shareholders support the binding vote on the three-year remuneration policy and the advisory vote on the annual remuneration report.

How’s the company doing on diversity? Three of Marston’s seven directors are female and two are from an ethnic minority background.

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