Interactive Investor

Will this FTSE 250 CEO trigger third AGM revolt in three years?

6th January 2023 08:37

by Graeme Evans from interactive investor

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Pay will be centre stage at one of the upcoming higher profile annual meetings, while the largest shareholder is looking to oust the chairman at this well-known small-cap firm.

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WH Smith (LSE:SMWH) will be hoping to avoid another AGM rebellion later this month, having seen its pay decisions come under fire at the two previous annual meetings.

The retailer’s remuneration report only received 54% backing at the 2022 AGM, after shareholders protested over the £550,000 bonus paid to chief executive Carl Cowling in a year of government Covid support. It was the second year in a row that WH Smith had been in the firing line, following criticism of the pay rise awarded to Cowling in 2020. 

The Topps Tiles (LSE:TPT) AGM is due to take place on the same day and includes a resolution from its largest shareholder calling for chairman Darren Shapland to be removed from post.

WH Smith

When: 11.30am, Wednesday 18 January.

Where: Herbert Smith Freehills, Exchange House, Primrose Street, London EC2A 2EG.

How to participate: Proxy voting instructions must be returned by 11.30am, Monday 16 January. More AGM details can be found here.

Who’s in the chair? Former Direct Line chief executive Annette Court joined the board in September and succeeded Henry Staunton as chair on 1 December. She is currently chair of Admiral and a non-executive director of Sage.

How did the company do in the year to 31 August? Revenues of £1.4 billion were the highest since the high street and travel retail group was created in its current form in 2006. The sales figure was 58% higher than a year earlier and slightly ahead of the pre-pandemic level in 2019. Pre-tax profits of £63 million were up from a loss of £116 million, while earnings per share of 36.2p compared with a loss of 62.6p previously. Dividend payments have been restored, with 9.1p a share due to be paid on 26 January.

How have shares performed? Down 12% to 1,429.5p (1,574p on Thursday).

How much is the boss paid? The salary of Carl Cowling increased in April by £25,000 to £600,000, in line with plans in place on his appointment as chief executive in November 2019. The company’s strong profits performance contributed to Cowling receiving the maximum bonus opportunity of £960,000, of which £499,200 has been deferred into shares. For the third year in a row, long-term incentive awards did not vest as Covid meant the earnings per share and total shareholder return metrics were missed. This left total remuneration for Cowling at £1.63 million while chief operating officer Robert Moorhead got £1.29 million.

What happened at last year’s AGM? The payment of a £550,000 bonus to Cowling in a year of Covid support from the UK government meant 45.6% of votes went against the annual remuneration report. A year earlier, a third of votes failed to back the report due to concern over the £25,000 salary increase awarded to Cowling in July 2020.

What’s the company said about the dissent? Having sought feedback from shareholders, new remuneration committee chair Marion Sears said most of the concerns were specific to the impact of Covid-19 and should not recur.

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? Women held 37% of boardroom roles at the end of the financial year, with 30% in the group executive team and 35% in senior leadership. The company meets the Parker Review target for non-white directors but recognises that there is more to do to increase ethnic representation across the business.


When: 9am, Wednesday 18 January.

Where: The Charterhouse, Charterhouse Square, London EC1M 6AN.

How to participate:Diploma (LSE:DPLM) says proxy voting instructions need to be received no later than 48 hours before the meeting. More AGM details can be found here.

Who’s in the chair? David Lowden, who has led the board since January 2022, was previously chief executive of Taylor Nelson Sofres. He has been chair at PageGroup and Huntsworth and is currently chair at Capita.

How did the company do in the year to 30 September? The life sciences, seals and controls business lifted revenues by 29% to £1.01 billion, reflecting strong organic growth as well as the impact of acquisitions and foreign exchange. Operating profits rose 38% to £144.3 million and adjusted earnings per share by 26% to 107.5p. The total dividend increased by 26% to 53.8p, including a 29% increase in the final dividend to 38.8p for payment on 3 February.

How have shares performed? Down 19% to 2,324p (2,834p on Thursday).

How much is the boss paid? A 6% pay rise has taken the salary of Johnny Thomson to £754,000. His total remuneration for the most recent financial year came to £3.8 million, including £881,000 after the annual bonus scheme paid the maximum 125% of salary. The vesting of long-term incentive awards accounted for £2 million after Diploma achieved a three-year compound annual growth rate for adjusted earnings per share of 19% and its total shareholder return ranked among the best in the FTSE 250 index.

What’s in the new remuneration policy? Diploma's remuneration committee believes there’s a “compelling case” to increase the total pay potential for executive directors as the company has grown considerably in size and complexity since the last policy review in 2019. In order to focus on incentivising long-term performance, it is planning to increase the maximum award potential for the performance share plan from 250% to 300% of base salary for the chief executive and to 250% for the chief financial officer.

How did last year’s AGM go? The annual remuneration report was backed with 93.3% of votes in favour, an improvement on 55% the previous year after some shareholders raised concerns about the early vesting of the retiring finance director’s performance awards.

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

How’s the company doing on diversity? The departure of finance boss Barbara Gibbes at the end of the financial year left two women among the seven-strong board of directors. The company said it intends to meet the targets of the Hampton-Alexander and Parker reviews on gender and ethnic diversity.

Topps Tiles

When: 9.30am, Wednesday 18 January.

Where: Marriott Hotel, Smith Way, Grove Park, Leicester, LE19 1SW.

How to participate: Proxy voting instructions need to be returned no later than 9.30am, Monday 16 January. Shareholders are encouraged to submit questions via email to  by the same deadline. More AGM details can be found here

Who’s in the chair? Darren Shapland joined the board in 2015. He was chief financial officer at Sainsbury between 2005 and 2010 and chief executive of Carpetright in 2012 and 2013.

How did the company do in the year to 1 October? A second consecutive record year saw an 8.4% increase in revenues to £247.2 million as market share increased to 19% from 17.6%. Adjusted profits rose 4% to £15.6 million and earnings per share by 2% to 6.14p, but the profits figure was 22% lower at £10.9 million when including property and business development costs. A final dividend of 2.6p a share for payment on 3 February is 16% lower, but the total for the year of 3.6p is up 16.1% year on year.

How have shares performed? Down 43% to 38.5p (48p on Thursday).

How much is the boss paid? Rob Parker’s salary increased by 2% in October to £420,240. His total remuneration for the most recent financial year came to £736,000 after the annual bonus scheme paid £198,000, based on 48.1% of the maximum opportunity. The vesting of long-term incentives contributed £64,000.

What’s in the new remuneration policy? Changes include an increase in the maximum annual bonus opportunity from 100% to 125% for both executive directors. There’s also a compulsory deferral of 30% of any bonus payable into shares for two years.

How did last year’s AGM go? The annual remuneration report was approved with 99.32% of votes in favour. But the opposition of major shareholder MS Galleon meant the re-election of chair Darren Shapland was passed with more than 22% of votes against.

Why is MS Galleon calling for Shapland to be removed from office? It believes Topps has performed below expectations during his tenure: “In our view, there is an inadequate growth strategy currently in place.” The Vienna-based home improvement company, whose brands include tile maker Cersanit, has built a 29.9% stake in Topps. It has tabled an AGM resolution calling for Shapland to be ousted and for the appointment of two new non-executive directors.

What’s Topps said about the special resolution? The company has resisted calls from MS Galleon to purchase a greater proportion of its tiles from Cersanit, arguing that doing so would not be in the interests of all shareholders. It adds that its board is well qualified and experienced and has helped the executive team steer the business through Covid-19 to a position stronger than pre-pandemic. The company’s three biggest shareholders other than MS Galleon are in support of the company, including co-founder Stuart Williams.

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