Interactive Investor

Your vote counts: Babcock, Moonpig, AO World, Novacyt, Diageo

17th September 2021 11:30

Graeme Evans from interactive investor

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There’s a notable uptick in AGM activity, so we’re giving you notice and comment on five of the big ones. 

It's never been easier for interactive investor customers to find their collective voice and help bring about positive change in the boardroom, whether on pay, the climate or diversity.

So far, just under a fifth of our customers have updated their account preferences so they get event notifications for the UK-listed companies they own shares in. This provides the gateway to them exercising their right to attend and speak at AGMs or to vote on resolutions.

But getting involved takes a little forward planning, which is why we've expanded our AGM preview coverage to the next fortnight, so our customers know well in advance where, when and how to participate in the meetings of some of the UK's biggest companies.

It's worth noting that companies have different approaches to your attendance at their AGMs, with the meeting of Diageo (LSE:DGE) later this month a combined physical and electronic meeting but Moonpig (LSE:MOON), AO World (LSE:AO.) and Babcock International Group (LSE:BAB) in person only. And if voting by proxy, remember that the deadline is normally two days in advance of the AGM taking place.

Babcock International

When: 11am, Wednesday, 22 September

Where: Grosvenor House Hotel, Park Lane, London W1K 7TN. The AGM is expected to go ahead as a physical meeting.

Shareholders are asked to notify Babcock in advance if they are intending to attend the AGM.

How to participate: Proxy votes must be received by 11am on Monday, 20 September.

Who is in the chair? Ruth Carnie, a former senior executive at Royal Dutch Shell.

How did the financial year go? Significant write-downs pushed the FTSE 250 company to an operating loss of £1.6 billion, but with a turnaround plan in place and at least £400 million being raised from disposals the company believes a tighter focus on aerospace, defence and security markets will end a run of underperformance.

How much is the chief executive paid? Former Cobham boss David Lockwood took over in September on an annual salary of £800,000, with annual bonus and performance share plan award opportunities of 150% and 200% of salary respectively.

What's the view of the voting agencies? Glass Lewis is concerned about the £560,000 a year salary of new finance boss David Mellors, which it notes is 25% higher than his predecessor. The agency recommends shareholders vote against the remuneration report, although Institutional Shareholder Services has no voting concerns and said executive pay at the company has generally taken into account the impact of Covid-19.

How did the 2020 AGM go? Votes on the remuneration policy and remuneration report were approved, with 99.5% of votes cast being in favour.

How is it doing on diversity targets? Babcock has set a new target to ensure that 30% of senior leadership roles are filled by women by 2025, compared with 21% currently. It is also working on meeting the Parker Review on ethnic representation in the boardroom.

Moonpig

When? 10am, Tuesday, 28 September

Where? The Goldsmiths’ Centre, 42 Britton Street, London EC1M 5AD 

How to participate: Proxy votes must be received by 10am on Friday, 24 September. Shareholders wanting to ask questions at the meeting are asked to contact investors@moonpig.com in advance.

Who is the chair? Kate Swann, former WH Smith chief executive.

How did the financial year go? The group outperformed the guidance set out in its IPO prospectus in February, with revenues up by 113% to £368.2 million and underlying earnings more than doubling to £92.1 million, as it benefited from a surge in people wanting to connect with their family and friends during the pandemic.

How much is the chief executive paid? The base salary for chief executive Nickyl Raithatha was set at £580,000 in the IPO and won't increase in this financial year. His annual bonus opportunity is up to 150% of salary, but there's no 2022 long-term incentive scheme in place due to awards introduced prior to the IPO.

What's the view of the voting agencies? Due to this being the first AGM, the company’s remuneration policy is being put to the meeting for approval. Glass Lewis has recommended shareholders vote in favour of the three-year policy as well as the annual remuneration report.

How is the company doing on diversity targets? It has committed to meet the Hampton-Alexander target for FTSE 250 companies to have at least 33% representation of women on the board by the time of the 2022 AGM. At the time of the annual report, the board had 29% female representation and meets the target set out in the Parker Review for companies to have one or more directors from a diverse ethnic background by 2024.

AO World 

When? 8am, Wednesday, 29 September

Where? The company's Manchester office at Baskerville House, Browncross Street, West Riverside, Salford, M60 9HP 

How to participate: Proxy votes are needed by 8am on Monday, 27 September. Questions relating to the AGM resolutions should be sent to 2021AGM@ao.com and will be responded to on an individual basis.

Who is in the chair? Geoff Cooper, former Travis Perkins chief executive.

How did the financial year go? Demand for online goods surged at the start of the first lockdown, leading to an increase in revenues of 62% to £1.6 billion and pre-tax profits of £20 million compared with just £1 million the year before. It attracted over two million new customers in the UK and Germany, where operations broke even for the first time in the Q3 peak trading period.

How much is the chief executive paid? Founder John Roberts, who owns about 23% of the business, was paid a total of £976,655. This includes his base salary of £464,000 and a cash bonus of £452,400, which equates to a third of his award after almost all targets for the year were met. The remainder will be released as a deferred share award in 2024.  

How did last year's AGM go? The remuneration report got 99.66% support, while the adoption of the Value Creation Plan was backed with 90.5% of votes cast. This scheme covers the whole workforce and begins funding at a share price of 523p, compared with 240p this week.

What's the view of voting agencies? Glass Lewis has concerns about the Value Creation Plan (VCP) due to the potential for excessive remuneration based solely on market capitalisation. However, it added: “We recognise the level of shareholder support at the previous AGM and note that the VCP extends to below-board employees, mitigating our concerns somewhat.” It is in favour of the triennial remuneration policy, as well as the annual remuneration report.

Any other issues? Glass Lewis is opposed to the re-election of non-executive director Shaun McCabe, who is Trainline chief financial officer and accepted a boardroom role at Boohoo during the year. AO World is satisfied McCabe will be able to perform his duties, but the agency is concerned: “We believe that a non-executive director of a publicly-listed company should retain some spare capacity in case a crisis or other event escalates the demand on their time.”

Novacyt

When? 1pm, Wednesday, 29 September

Where? Paris-based firm Novacyt's (LSE:NCYT) AGM is being held as a closed meeting due to precautionary measures put in place by the French government as a result of Covid-19.

How to participate: Shareholders will be able to view a live webcast of the AGM and a recording will be available on the company's website. They can vote online until midnight on Saturday, 25 September.

Who is in the chair? James Wakefield, a private equity investor who spent 18 years at Bridgepoint and has been chairman or non-executive of over 30 companies.

How did 2020 go? It was a transformational year for the diagnostics firm due to its quick response developing a rapid and reliable CE-IVD marked Covid-19 testing kit. Its headcount more than doubled to 237 people as revenues surged 20 times to £277 million, triggering a big jump in the share price in 2020.

How much did the chief executive get? Graham Mullis, who is stepping down in October after 13 years with the group, is rewarded for the company's strong performance. A long-term incentive scheme worth £8.2 million is being paid in three stages up to 2022, while there's also an annual bonus of £264,341 on top of his basic salary of £322,263.

What's the view of voting agencies?

There are concerns at various resolutions seeking the authority to increase the company's share capital, which Glass Lewis points out under French law may be used as a takeover defence. The agency added: “We consider that potential dilution to current shareholders from capital increases without pre-emptive rights is excessive. As a result, we believe that shareholders should refrain from supporting these capital authorities as well as all related proposals.”

Diageo

When? 2.30pm, Thursday, 30 September

Where? etc.venues, St Paul’s, 200 Aldersgate, London EC1A 4DH. The meeting will be held as a combined physical and electronic meeting using the Lumi platform with an additional telephone facility for questions. However, the company is keeping to strict guidelines due to Covid-19. This means no refreshments before or after the AGM and directors will not be available to circulate with shareholders following the AGM.

How to participate: Shareholders are asked to join the AGM through the online Lumi platform. Those wishing to attend in person should email agm.2021@diageo.com by 28 September. Voting will be conducted using poll cards at the physical meeting and shareholders attending the meeting electronically will be able to vote live on all resolutions using the Lumi platform. Proxy votes should be received by 2.30pm on Tuesday, 28 September.

Who is in the chair? Javier Ferran, former Bacardi chief executive.

How did the financial year go? The closure of bars and restaurants and loss of airport sales due to the pandemic failed to prevent reported sales increasing 8.3% and basic earnings per share before exceptionals lifting 7.4% to 113.8p. The final dividend increased 4% to 72.55p.

How much is the chief executive paid? Ivan Menezes got a total of £5.9 million, including an annual bonus of £2.3 million after financial performance targets were exceeded in the year. Share awards under the 2018 long-term incentive plan were low in the context of the £23 billion returned to shareholders over the same period, but the remuneration committee decided not to apply discretion to the figure for Menezes of just under £2 million.

What's the view of voting agencies? Glass Lewis is in favour of all resolutions, including the remuneration report.

What about diversity? Diageo ranked the number one FTSE company for female board and leadership representation in the 2020 Hampton Alexander Review and has since increased female board representation to 60% and the percentage of female leaders globally is now 42%.  

It also meets targets on ethnic diversity in accordance with the Parker Review.

How did last year's AGM go? The remuneration policy was backed by 93.12% of votes cast, with the annual remuneration report getting 97.1% support.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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