Interactive Investor

Will wages be waved through at Games Workshop and Auto Trader AGMs?

It seems the boss of Games Workshop may be underpaid, but there’s something else troubling the voting agencies. We look at likely outcomes when pay is put to the shareholder vote.

1st September 2023 10:19

by Graeme Evans from interactive investor

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Kevin Rountree’s rewards for steering Games Workshop Group (LSE:GAW) towards the top of the FTSE 250 are unlikely to prove controversial at the Warhammer firm’s forthcoming AGM.

Games Workshop does not run a long-term incentive scheme, meaning the potential total remuneration for its executive directors is significantly lower than mid-cap peers.

Rountree, who has been chief executive since 2015, got £1.4 million following a financial year in which the group set a series of results milestones and shares rose by a third.

The figure included a £675,000 bonus, which was made at the independent discretion of the remuneration committee to reflect the delivery of “proven, exceptional performance”.

The company believes longer-term pay schemes unbalance an organisation, with individuals being incentivised to achieve personal goals at the expense of the wider organisation.

Auto Trader

When: 10am, Thursday 14 September.

Where: 4th Floor, 1 Tony Wilson Place, Manchester M15 4FN.

How to participate: Proxy voting instructions must be returned no later than 10am, Tuesday 12 September. More AGM details can be found here.

Who’s in the chair? Ex-Rightmove chief executive Ed Williams is hosting his final AGM at Auto Trader Group (LSE:AUTO), having held the role since the company’s IPO in 2015. Former Halfords and Pets at Home boss Matt Davies is due to take over at the conclusion of the meeting.

How did the company do in the year to 31 March? The automotive marketplace reported a 16% rise in revenues to £500.2 million, aided by a 10% or £227 increase in the average revenues per retailer to £2,437 a month. The acquisition of the loss-making Autorama meant  operating profits fell 9% to £277.6 million. Earnings per share fell 2% to 25.01p, improving to a rise of 6% to 27.12p on an adjusted basis. A final dividend of 5.6p a share is due to be paid on 22 September, leaving the total for the year 2% higher at 8.4p a share.

How have shares performed? Down 3% to 616.2p (606.4p on Thursday).

How much is the boss paid? Nathan Coe’s salary increased in July by 5% to £626,578. His total remuneration for 2022/23 amounted to £1.28 million, down from £1.67 million the year before. The total included £648,000 from the annual bonus scheme, which paid 72.4% of the maximum opportunity after a reduction of 7.9 percentage points due to Autorama’s bigger-than-expected loss of £11.2 million. Long-term incentives granted during the pandemic in 2020 failed to vest. These were benchmarked solely on total shareholder return versus the wider FTSE 350 in order to ensure the company’s focus on long-term recovery. The outturn suffered in the wider tech sector sell-off, with the company’s remuneration committee deciding not to apply positive discretion in light of shareholder sensitivity.

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

How did last year’s AGM go? The annual remuneration report was approved with 98.19% of votes in favour.

How’s the company doing on diversity? Five women accounted for 56% of boardroom roles at the end of March. The company meets the recommendation of the Parker Review that at least one director should be from an ethnically diverse background.


When: 10am, Tuesday 19 September.

Where: Link Group, 6th Floor, 65 Gresham St, London EC2V 7NQ.

How to participate: Proxy voting instructions would usually be required two working days before the meeting but appear in Moonpig Group Ordinary Shares (LSE:MOON)'s AGM notice as 10am, Sunday 17 September. More AGM details can be found here.

Who’s in the chair? Former WH Smith boss Kate Swann was appointed in 2019 and oversaw the company’s stock market flotation in February 2021.

How did the company do in the year to 30 April? Revenues rose 5.2% to £320.1 million and adjusted earnings by 12.4% to £84.2 million. Pre-tax profits fell by 12.6% to £34.9 million, partly due to higher finance charges, and basic earnings per share declined by 15.6% to 7.8p. There was no dividend as the company continues to invest in growth.

How have shares performed? Down 29% to 136.9p (169.5p on Thursday).

How much is the boss paid? Nickyl Raithatha’s base salary of £597,400 is unchanged for this year. His annual bonus of £60,039 represented 6.7% of the maximum opportunity after the only metric achieved was the renewable energy mix at the group’s two new fulfilment centres.  No bonus was awarded for financial metrics as revenue and adjusted earnings were both more than 5% lower than the group’s internal targets, while the Royal Mail strike action contributed to the customer service benchmark being below the threshold. The 100% vesting of share awards made before the IPO generated £5.8 million and took his overall remuneration to £6.27 million, The awards were agreed by the company’s private equity owner prior to listing on the London stock market and do not form part of the company’s remuneration policy.  

What’s in the new remuneration policy? The grant of long-term incentives will be increased to 250% of salary, from 200% currently. It also includes an additional one-off award of 200% in the 2024 financial year, subject to challenging performance conditions. Meanwhile, a requirement for directors to hold 200% of salary in shares will be increased to 300%.

Why is the company making the changes? The remuneration committee says it wants to ensure that executive directors are motivated and retained for at least the next three to five years. It points out that the sector is extremely competitive, with the leadership team receiving regular approaches from listed and private equity backed companies offering potentially more significant equity-based reward than at Moonpig. There’s also limited prospect of the current outstanding long-term incentive awards delivering significant vesting, meaning that the existing ongoing pipeline of retentive awards is very limited.

What’s the view of voting agencies? Glass Lewis has “strong reservations” about the grant of an additional one-off long-term incentive award worth 200% of base salary. It said: “While we understand the importance of providing a competitive remuneration package, and acknowledge the company's retention concerns, we believe the additional award to be excessive.” It recommends shareholders oppose the binding resolution on the new three-year remuneration policy but support the advisory vote on the annual remuneration report.

How did last year’s AGM go? The annual remuneration report was approved with 99.4% of votes in favour.

How’s the company doing on diversity? Women hold 38% of board level posts, while there are two directors from a minority ethnic background.

Games Workshop

When: 10am, Wednesday 20 September.

Where: Willow Road, Lenton, Nottingham, NG7 2WS.

How to participate: Proxy voting instructions should be returned no later than 10am, Monday 18 September. More AGM details can be found here.

Who’s in the chair? John Brewis, a former divisional director at Reach, is hosting the AGM for the first time. He has been a non-executive director since 2018. 

How did the company do in the year to 28 May? Core sales of £445.4 million were 15% higher and resulted in record pre-tax profit of £170.6 million, up from £156.5 million the year before. Earnings per share topped 400p for the first time at 409.7p, up from 391.3p previously despite inflationary cost pressures. Shareholder dividends declared in the period rose to a record 415p a share, up from 235p in the prior period.

How have shares performed? Up 31% at 9,435p (10,820p on Thursday).

How much is the boss paid? Kevin Rountree’s total remuneration for the year amounted to £1.4 million, including his base salary of £715,000 and a bonus award of £675,000 based on 67% of the maximum opportunity. The payment is at the discretion of the remuneration committee based on exceptional financial and operational performance being achieved during the year. The award is payable in cash, with 67% required to be invested in the company’s shares and ideally held for at least three years. The company’s pay policy does not offer long-term incentives. In the annual report, the remuneration committee is “very mindful” of the risks of incentive plans and complex bonus schemes driving short-term and/or individual behaviour which are not in the interests of the company and its shareholders. No advisers were employed to review executive remuneration during 2022/23.

How did last year’s AGM go? The annual remuneration report was approved with 89% of votes in favour. 

What’s the view of voting agencies? Glass Lewis said Rountree’s total remuneration appears to significantly lag behind the company's peers relative to the total shareholder return. However, it continues to be concerned with the company's “seemingly oblique approach to paying for performance”. It is especially troubled by the lack of a long-term incentive plan and the over-emphasis on guaranteed and short-term at risk pay. Overall, however, it does not believe the implementation of the remuneration policy warrants any shareholder action and recommends support for the annual remuneration report.

How’s the company doing on diversity? Two female directors account for an overall gender diversity level of 33%, below the 40% set out in Listing Rules and compared with 60% in 2021/22. One member of the board is from an ethnic minority background.

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