Blue-chip AGMs come think and fast in the days ahead and, with many being live streamed for shareholders, some contentious votes could make things entertaining.
The first AGM in Barclays' (LSE:BARC) history to take place outside London is likely to be a contentious one as shareholders consider recent changes at the top of the banking giant.
Advisory group Glass Lewis has recommended that shareholders vote against the company’s remuneration report due to concerns about the fixed pay of chief executive C.S. Venkatakrishnan, who replaced Jes Staley in November.
The event in Manchester is one of several blue-chip AGMs taking place in the coming days, with plans by Ocado Group (LSE:OCDO) to extend its Value Creation Plan also likely to prove controversial.
The meetings of BAE Systems (LSE:BA.), GlaxoSmithKline (LSE:GSK) and Unilever (LSE:ULVR), as well as Barclays and Ocado, are being live streamed for the benefit of shareholders unable to attend in person.
When: 11am, Wednesday 4 May.
Where: Manchester Central Convention Complex, Petersfield, Manchester, M2 3GX.
How to participate: This will be the first AGM in Barclays’ history to take place outside London, in line with plans to hold the event in some years at locations where Barclays has a significant business or customer presence. Shareholders are able to attend electronically and vote through an online platform. Questions can be asked at the AGM or in advance of the meeting by email to email@example.com and the last date for the return of proxy voting forms is 11am, Friday 29 April. More AGM details can be found here.
Who’s in the chair? Nigel Higgins has been in the role since May 2019. He spent 36 years at Rothschild, where he was most recently deputy chairman.
How did the company do in 2021? The group delivered a record profit of £8.4 billion and return on tangible equity of 13.4% after double-digit improvements in all operating divisions. Total income rose 1% to £21.94 billion. The overall dividend for 2021 came to 6p a share, up from 1p the previous year and included the payment of 4p a share on 5 April. Buybacks worth £1.5 billion bring the total capital return for 2021 to the equivalent of 15p a share.
How have shares performed? Up 25% to 187p (150p on Thursday).
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How much is the boss paid? C.S. Venkatakrishnan, known as Venkat and previously head of global markets, was appointed chief executive from 1 November on fixed pay of £2.7 million. This is delivered 50% in cash and 50% in shares over five years. He is eligible for an annual bonus up to a maximum value of 93% of fixed pay and up to 140% for the long-term incentive plan. His fixed pay increased by 3% in March to £2.78 million.
What about his predecessor? Jes Staley stood down as chief executive on 31 October and is legally and contractually entitled to 12 months' notice, during which he continues to receive his fixed pay, pension allowance and repatriation costs to the United States. Almost 70% of his variable remuneration remains unvested. However, the remuneration committee exercised its discretion to suspend vesting, pending ongoing regulatory investigations. His total remuneration for 2021 came to £2.1 million, mainly from fixed pay of £1.97 million.
What’s the view of voting agencies? Barclays argues that total compensation is well behind global banking peers and that its focus on shares for total variable pay aligns directors' interests with the shareholder experience. But Glass Lewis is unhappy that Venkat’s fixed pay exceeds Staley’s by 12.5%, preferring a phased approach. It adds: “We are concerned that benchmarking against international peers, including US companies, could result in excessive total remuneration opportunity, beyond what we consider to be appropriate for a FTSE listed bank.” While there’s no immediate concern about Staley’s leaving arrangements, the agency recommends shareholders vote against the remuneration report.
Is there a climate-related vote? Shareholders have an opportunity to vote on the company’s climate strategy, targets and progress. On its financed emissions, Barclays has announced new 2030 targets for energy, power, cement and steel. It has pledged new targets for additional sectors in 2023 and 2024 and is introducing a phase out date for thermal coal mining financing by 2030 in OECD countries and 2035 elsewhere. More details can be found here. Glass Lewis has recommended shareholders support the advisory Say on Climate vote.
How is the company doing on diversity? Robert Berry’s appointment in February as a non-executive director meant gender diversity on the board dropped to 31% female. This is now back to 38% after today’s retirement of Tushar Morzaria and his replacement as chief financial officer by Anna Cross. February’s FTSE Women Leaders Review recommends a voluntary target for FTSE 350 boards and leadership teams of at least 40% by the end of 2025. A quarter of the board was from an ethnically diverse background at the end of last year.
When: 2.30pm, Wednesday 4 May
Where: Sofitel London Heathrow, Terminal 5, London Heathrow Airport, TW6 2GD.
How to participate: The meeting will be broadcast live for shareholders to follow electronically. Questions can be submitted in advance of the AGM via the Lumi AGM website until 5pm on Monday 2 May, with these collated and answered during the Q&A session at the AGM. Proxy voting instructions must be received by company registrar Equiniti by 2.30pm on Friday 29 April. More details on the AGM can be found here.
Who’s in the chair? Sir Jonathan Symonds was appointed to the role in September 2019. He was previously chairman of HSBC and chief financial officer of Novartis.
How did the company do in 2021? Sales of £34 billion were 5% higher at constant exchange rates as sales of its Xevudy antibody treatment for Covid-19 lifted annual revenues growth in pharmaceuticals to 10%. Vaccine turnover was impacted by lower demand for routine appointments due to Covid redeployment, but adjusted earnings per share of 113.2p still came in 9% higher at constant exchange rates. A quarterly dividend of 23p a share was paid on 7 April, bringing the total for 2021 to an unchanged 80p a share.
How have shares performed? Up 19.7% to 1,606.6p (1,744.8p on Thursday).
How much is the boss paid? Emma Walmsley’s total remuneration for 2021 came to £8.2 million, a figure including £4.3 million of long-term incentive shares that vested at 58% of the total opportunity. She also got cash and deferred shares worth £2.29 million from an annual bonus scheme after operating profits of £8.56 billion came in higher than the company’s target. Walmsley’s salary for 2022 has increased 3% to £1.26 million.
What’s in the new remuneration policy? Due to the demerger of the consumer healthcare business, the pay policy has been reviewed outside of the usual three-year cycle. It is focused on ambitions for compound annual sales growth of more than 5% and adjusted operating profit above 10%. Glaxo has significantly reduced the pay opportunity for less than “on target” performance but is looking to reward “truly exceptional performance”. As a result, it is increasing the maximum annual bonus opportunity from 200% to 300% of base salary, but with this final 100% being deferred into shares for three years.
What’s the view of voting agencies? Glass Lewis accepts the company’s rationale for changes in the remuneration policy. In relation to the annual remuneration report, it drew attention to chief scientific officer Hal Barron receiving an 8% salary increase. Glaxo said this followed the creation of One R&D, a new organisation unifying scientists and governance across pharmaceuticals and vaccines. Dr Barron’s total remuneration came to $12.5 million (£9.6 million) last year, but given that he is reverting to a non-executive director role in the summer Glass Lewis believes the issue does not warrant shareholder action.
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How did last year’s AGM go? The annual report on remuneration was approved with 93% of votes in favour.
Is there a climate-related vote? No. In November 2020, Glaxo announced a commitment to have net zero climate impact and net positive impact on nature by 2030. Progress has included large-scale renewable energy investments at two major manufacturing sites, joining a coalition to curb deforestation and investing in R&D to cut greenhouse gas emissions from metered dose inhalers by up to 90%.
How is the company doing on diversity? Women held 38.4% of board positions at the start of 2021, with the company focused on returning this figure to above 40%. There are two directors from ethnically diverse backgrounds.
When: 2.30pm, Wednesday 4 May.
Where: Queen Elizabeth II Centre, Westminster, London SW1P 3EE.
How to participate: The company intends to stream a live webcast of the AGM, including the Q&A session. Shareholders can register their vote by using the electronic voting facility or by returning the proxy form no later than 2.30pm, Monday 2 May. Questions can be submitted in advance by emailing firstname.lastname@example.org before 1pm on Friday, 29 April. More AGM details can be found here.
Who’s in the chair? Nils Andersen was appointed in November 2019 and is also chairman of AkzoNobel. He is former chief executive of Danish shipping company Maersk.
How did the company do in 2021? Turnover increased 3.4% after the fastest underlying sales growth in nine years of 4.5%, with 2.9 percentage points of this coming from price and the rest from volume. Underlying earnings per share increased by 5.5% to 2.62 euros, including a negative impact of 2.3 percentage points from currency. The fourth quarter dividend of £0.3602 was paid on 22 March, leading to total growth for the year of 3%.
How have shares performed? Down 10.1% to 3,945p (3515p on Thursday).
How much is the boss paid? Alan Jope’s salary of 1.56 million euros (£1.3 million) will be reviewed in the second half of the year. His annual bonus came to 1.86 million euros (£1.54 million), partly deferred into shares for three years, after achieving 81% of the target opportunity. A further 1.4 million euros (£1.16 million) came from the vesting of long-term performance shares, bringing the total remuneration to 4.89 million euros (£4.06 million). Unilever said it had not changed targets or exercised discretion on variable pay awards in response to volatile business conditions.
What’s the view of voting agencies? Glass Lewis recommends voting in favour of the remuneration report.
How did last year’s AGM go? The remuneration policy was approved with 93.51% votes in favour, while the annual remuneration report got 96.88%.
Is there a vote on healthy eating? A campaign by responsible investment group ShareAction urged the Pot Noodle maker to adopt targets to increase the share of healthy foods in its sales. An AGM special resolution has since been withdrawn after the company agreed to publicly report the performance of its product portfolio against at least six government-endorsed nutrition benchmarks. These will be subject to shareholder scrutiny at future AGMs.
What about a climate-related vote? No. The company's Climate Transition Action Plan was put before shareholders for an advisory vote at last year’s AGM and received 99% support. The plan includes Unilever’s net zero and emission reduction goals and the actions needed to to meet them. It also describes how the company is integrating climate change considerations into its products and brands. An AGM advisory vote is due to take place every three years, with progress updated every year in the annual report.
How’s the company doing on diversity? Women held six out of 13 boardroom roles and accounted for 52% of all management staff. The company also meets the recommendations of the Parker review on board ethnicity.
When: 11am, Thursday 5 May.
Where: Hall 5, Farnborough International Exhibition and Conference Centre, Farnborough, Hampshire GU14 6QT.
How to participate: Shareholders who attend remotely via the Lumi AGM platform will be able to submit questions up to an hour before the meeting and during the event, as well as vote on the resolutions once the poll is open. Proxy voting forms are required no later than 11am, Tuesday 3 May. More AGM details can be found here.
Who’s in the chair? Sir Roger Carr, who was appointed in 2014, has been chairman of Centrica, Cadbury and Mitchells & Butlers.
How did the company do in 2021? Sales at the technology-led defence, aerospace and security solutions business increased 5% to £21.3 billion, resulting in a 12% rise in underlying earnings per share to 47.8p. A final dividend of 15.2p a share will be paid on 1 June for a total of 25.1p for the full year, an increase of 6% on a year earlier.
How have shares performed? Up 12.5% to 549.8p (741.2p on Thursday).
How much is the boss paid? Charles Woodburn’s base salary for this year has increased 2.5% to £1.135 million. His single figure remuneration for 2021 came to £6.34 million, the highest since his appointment in 2017, after he generated £2.4 million in cash and shares from an annual bonus scheme that paid 97% of the maximum opportunity. Long-term incentives granted in 2019 vested at 57.9% of their total and were worth £2.6 million.
How did last year’s AGM go? The annual remuneration report was only backed by 76.6% of votes amid concern about the use of one-off and exceptional remuneration arrangements to keep Woodburn after he was offered another job. These included a 9.5% increase in his base salary for last year. Since the AGM, BAE has taken steps to improve its succession planning and has identified possible "ready now" successors for key roles including the chief executive.
What’s the view of voting agencies? Glass Lewis believes the improvements to succession planning will prevent the need for further retention-related adjustments. It recommends shareholders vote in favour of the remuneration report.
Is there a climate-related vote? No. The company has set itself the target of achieving net zero greenhouse gas emissions across its operations by 2030 and working towards a net zero value chain by 2050.
How’s the company doing on diversity? There were five women on BAE’s 14-strong board at the end of 2021. The percentage of women on the executive committee improved to 21% from 8% at the end of 2021 and women comprise 39% of senior management. The company meets the Parker review, with one director from an ethnic minority background.
When: 10am, Wednesday 4 May.
Where: Numis Securities, 45 Gresham Street, London, EC2V 7BF.
How to participate: An online meeting platform will be available, providing shareholders with the opportunity to ask questions and submit votes. Questions can be submitted in advance at AGM.Questions@ocadogroup.com, while proxy voting forms need to be returned by 10am on Friday 29 April. More AGM details can be found here.
Who’s in the chair? Rick Haythornthwaite was appointed in January 2021. He’s previously been chair of Centrica and Network Rail and chief executive at Blue Circle and Invensys.
How did the company do in the year to 28 November? Revenues rose 7.2% to £2.5 billion, with the Retail business up 4.6% to £2.3 billion. However, the company reported a bigger full-year loss of £176.9 million following increased investment in its Solutions division as it rolls out the Ocado Smart Platform for powering new grocery services.
How have shares performed? Down 17.5% to 1,829p (1,090p on Thursday).
How much is the boss paid? Tim Steiner’s base salary was increased by 2.5% in April of last year to £738,000. His single figure remuneration for the most recent financial year came to £1.97 million and included a bonus of cash and deferred shares worth £1.17 million based on achieving around 57% of the maximum opportunity. No long-term incentive awards vested.
What’s in the new remuneration policy? Ocado wants to ensure the executive team is sufficiently incentivised so is seeking to extend its Value Creation Plan (VCP) for an additional three years and to increase the size of the “pool” from 2.75% to 3.25% of value created above a 10% hurdle growth rate. This additional 0.5% is earmarked for a wider group of leaders and potential new recruits. The cap on annual vesting will be £20 million for the chief executive and £5 million for other board members. There are no changes to the Annual Incentive Plan or other parts of remuneration policy.
What’s the view of voting agencies? Glass Lewis is concerned that share awards above the cap will be rolled forward and allowed to vest in subsequent years. While it recognises the need to support leadership retention and facilitate recruitment, it sees the “potential for excessive remuneration under the VCP, based solely on absolute total shareholder return.” Glass Lewis recommends shareholders vote against the remuneration policy and resolution on the amended VCP.
How did last year’s AGM go? The annual remuneration report was approved with 87.3% of votes in favour. Almost 30% of votes went against the report at the 2020 AGM after Steiner got a total of £58.7 million, fuelled by £54.1 million from the vesting of shares under a previous five year incentive plan.
Is there a climate-related vote? No. The company has a target to be net zero in its operations by 2035 and net zero within its value chain by 2040. More details on progress appear in the annual report.
How is the company doing on diversity? Last year’s AGM saw a significant vote of more than 20% against the re-election of Andrew Harrison, which the company partly attributed to concerns over gender diversity on the board. Ocado appointed Nadia Shouraboura in August and said the recruitment of an additional female director with technology experience will be a key focus in the coming months. It meets the recommendations of the Parker review to have at least one director from an ethnic minority background.
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