Will pay protests continue for this FTSE 100 duo?

This year’s combined £14.4 million for the bosses of Berkeley Group Holdings (The) (LSE:BKG) and Ashtead Group (LSE:AHT) will be under scrutiny after both companies were hit by big protests at their AGMs in 2022.

Almost 40% of votes were cast against the housebuilder’s new remuneration policy, while a third failed to back the annual pay report of the US-focused plant hire business. The two FTSE 100-listed companies hold their AGMs in early September.

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Berkeley continues to defend its policy, which this year resulted in chief executive Rob Perrins getting a single remuneration figure of £8 million.

It believes that its approach linked to long-term shareholder returns and with no short-term cash incentive element is the most appropriate for the group’s operating strategy.

The AGM discontent at Ashtead, where Brendan Horgan this year got $8.14 million (£6.38 million) after meeting his targets in full, has been linked to a standalone performance share award tied to the objectives of the company’s Sunbelt 3.0 strategic plan.

This is a one-off scheme but Ashtead has told shareholders its ability to attract and retain US executives continues to be hampered by the remuneration environment in the UK.

Berkeley Group

When: 11am, Friday 8 September.

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

How to participate: Proxy voting instructions are required by 11am, Wednesday 6 September. More AGM details can be found here.

Who’s in the chair? This is the first meeting for former Schroders CEO Michael Dobson, who took over from Glyn Barker at the conclusion of last year’s AGM.

How did the company do in the year to 30 April? Revenues were 8.6% higher at £2.55 billion after the company sold 4,043 new homes across London and the South East, up from 3,760 the year before, and at a slightly higher average selling price of £608,000. Earnings per share increased by 2.1% to 426.8p, while Berkeley said its return on equity of 18.7% compared favourably with a sector average 13.7%. The 10-year performance is a sector-leading 27.4%. Berkeley reiterated its commitment to make £283 million or 263p a share per year of shareholder returns up to September 2025.

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How have shares performed? Up 9% to 4,447p (3,912p on Thursday).

How much is the boss paid? Rob Perrins, who has been chief executive since September 2009, continues to receive a base salary of £597,000 after no change for 2023-24. The company does not operate a bonus plan for executive directors but performance conditions under the long-term incentive scheme were met in full, meaning that the maximum level of options vested. This resulted in total remuneration of £8 million, the most allowed under the cap put in place for the financial year.

How did last year’s AGM go? The annual remuneration report was backed with 92.3% of votes in favour but the remuneration policy received 39.7% of votes against. The new three-year policy introduced a mix of long-term incentives involving a restricted share plan and long-term options. Annual grants of restricted shares are made from September, with vesting after four years being subject to return on equity and strategic underpins. One-off options will have an exercise price equal to the higher of the share price at grant and 4,850p, with vesting in five annual tranches from 2026. The exercise price of the options increases by 250p per year from September 2027 onwards.

How has the company responded to the vote? It has acknowledged that some shareholders and proxy advisers prefer an approach incorporating a more market familiar performance share plan. Despite this, the board continues to believe that a remuneration policy linked to long-term shareholder returns with no short-term cash incentive element “is the most appropriate for the group’s long-term operating strategy”. In response to feedback at the time of last year’s AGM, the remuneration committee has committed to amend the change of control provisions for long-term remuneration.

How’s the company doing on diversity? WithBerkeley in the process of streamlining its board from 15 positions to nine, female representation will improve from 33.3% at the end of the financial year to 40% after the AGM. The group meets the ethnic diversity target set by the Parker Review.

Ashtead

When: 11.30am, Wednesday 6 September.

Where: Wax Chandlers Hall, 6 Gresham Street, London, EC2V 7AD.

How to participate: Proxy voting forms need to be returned no later than 11.30am, Monday 4 September. More AGM details can be found here.

Who’s in the chair? Paul Walker, who joined the board in 2018, is the former chief executive of Sage.

How did the company do in the year to 30 April? The Sunbelt tool and plant hire business, which generates over 90% of its revenues and 95% of operating profits in North America, reported a record performance as revenues rose by 24% to $9.67 billion (£7.6 billion). Pre-tax profits improved 30% to $2.16 billion (£1.7 billion) and earnings per share by 32% to 368.4 cents (289.7p). A final dividend of 85 cents a share (approx 66.85p) is due to be paid on 12 September, lifting the total for the year by 25% to 100 cents.

How have shares performed? Up 10% to 4,577p (5,372p on Thursday).

How much is the boss paid? Brendan Horgan, who was appointed in 2019, receives a basic salary of $1.12 million (£880,000) following a pay rise of 4% in May. His total remuneration for 2022-23 amounted to $8.14 million (£6.38 million), which is up from $5.9 million the year before and the highest for the role since former boss Geoff Drabble got £7.2 million in 2014.

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Annual targets were met in full and resulted in Horgan getting a shares-led bonus worth $3.12 million (£2.45 million), alongside $3.9 million (£3.1 million) from the 100% vesting of long-term incentive granted in 2020. 

How did last year’s AGM go? The annual remuneration report was backed with 67.3% of votes in favour. The show of shareholder dissent came a year after the new remuneration policy was approved with 39.3% votes against the resolution. The votes follow the introduction of a standalone performance share award linked directly to the objectives of the company’s Sunbelt 3.0 strategic plan. This has a market value of 350% of base salary and is measured over a three-year period to April 2024.

How has the company responded? A new policy is due to be put to shareholders at the AGM in 2024 and will no longer contain the option of a one-off award to executive directors. The remuneration committee also intends to review the performance measures on its long-term incentive plan awards, including the level of vesting at threshold performance.

How does pay compare with US-listed rivals? Ashtead points out that shareholders have enjoyed significant benefits by being exposed to North American markets. However, it adds that the group’s ability to attract and retain the calibre of senior executives, who are citizens of and reside in the US, continues to be hampered severely by the remuneration environment in the UK. It has pledged to address this “as a matter of urgency” in its 2024 policy.

How’s the company doing on diversity? Four members of the board accounting for 44% of the total are female and one director is from a minority ethnic background.

Currys

When: 11am, Thursday 7 September.

Where: Hilton London Kensington, 179-199 Holland Park Avenue, London, W11 4UL.

How to participate: Votes and questions must be submitted before 11am, Tuesday 5 September. More AGM details can be found here.

Who’s in the chair? Ian Dyson, the former Punch Taverns CEO and Marks & Spencer director, joined the board last September.

How did the company do in the year to 29 April? Revenues fell by 6% to £9.51 billion, with adjusted profits of £119 million at top end of guidance but still down £73 million year-on-year following competitive pressures in the Nordics business. The UK and Ireland business improved by 45% to £170 million. The loss before tax of £450 million was driven by a non-cash goodwill impairment of £511 million arising out of the Dixons Carphone merger in 2014. Year-end debt of £97 million compared with £44 million net cash the previous year. There was no full-year dividend, having paid 2.15p a share the previous year.

How have shares performed? Down 40% at 57p (49p on Thursday).

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How much is the boss paid? Alex Baldock’s base salary increased by 4% in July to £942,650. His total remuneration for 2022-23 amounted to £2.24 million, down from £2.49 million the year before. The figure included £450,000 after the annual bonus scheme awarded 33.4% of the maximum opportunity. Baldock requested that he receive all this sum in shares as he builds towards the company’s 250% shareholding requirement. Free cash flow targets meant the 50% vesting of long-term incentives, contributing £717,000 to the final figure.

How did last year’s AGM go? The annual remuneration report received 86.90% of votes in favour, while the new three-year remuneration policy got 65.95% support.

How has the company responded to last year’s dissent? Executive directors are now required to retain at least 100% of their Currys shares for two years post-employment, compared with the previous requirement for them to retain at least 100% for one year and then at least 50% in the following year.

How’s the company doing on diversity? At the end of the financial year,  three women accounted for 37.5% of board roles and one director was from a minority ethnic background.

Subsequent appointments mean the board is now 10-strong and 40% of directors are female.