Some of the wealthiest bosses in the UK have their salaries put to the vote in the weeks ahead. Do you agree with the huge sums being paid?
BP chief executive Bernard Looney (pictured) received remuneration of £10 million for 2022, even though the company used downward discretion to offset the windfall gains created by share price movements since early 2020. It also lowered his bonus by £78,329 to take into account four fatalities, a move that proxy voting agency Glass Lewis has described as inadequate.
Meanwhile, Astra boss Pascal Soriot picked up more than £15 million for the fourth year in a row, as the boss of the pharmaceuticals giant reaped his reward for overseeing a 58% jump in total shareholder return over the past three years.
Other pay deals in the spotlight at forthcoming AGMs include the £8.45 million for GSK (LSE:GSK)’s Emma Walmsley, the £5.2 million awarded to Barclays (LSE:BARC) boss C.S. Venkatakrishnan and the £4.7 million for London Stock Exchange Group (LSE:LSEG) chief David Schwimmer.
When: 1pm, Thursday 27 April.
Where: ExCeL London, One Western Gateway, Royal Victoria Dock, London E16 1XL.
How to participate: There will be online access via the Lumi electronic meeting platform, including the opportunity to vote during the event. Those voting in advance should do so by 1pm, Tuesday 25 April. The deadline to pre-submit questions is 5pm, Thursday 20 April. More AGM details can be found here.
Who’s in the chair? Helge Lund was appointed in January 2019, having served as chief executive of BG Group from 2015 until its merger with Shell in 2016.
How did the company do in 2022? Underlying replacement cost profit of $27.65 billion (£22.2 billion) compared with $12.8 billion in 2021. Net debt fell by $9.2 billion(£7.4 billion) as part of 11 successive quarters of decline to the lowest figure since 2013 at $21.4 billion (£17.1 billion). BP increased the fourth quarter dividend to 6.61 cents a share, a 21% rise on a year earlier. This was paid on 31 March and brought the total for 2022 to 24.08 cents a share.
How have shares performed? Up 40% to 474.9p (538.7p on Thursday).
How much is the boss paid? Bernard Looney’s salary will increase by 4% to £1.45 million following the 2023 AGM. His total remuneration for 2022 of just over £10 million is more than double the previous year’s level and the highest for a BP chief executive since Bob Dudley received $13.2 million (£10.6 million) in 2019. The annual bonus award of £2.4 million was based on 75% of the maximum opportunity while long-term performance shares generated £6 million, equivalent to 54% of the total opportunity.
How was discretion used? To take into account the windfall gains created by share price volatility since March 2020, the company has applied a 10% adjustment to the original 60% vesting outcome for the 2020-22 long-term incentive plan (LTIP). This resulted in a reduction for Looney of £667,497. The remuneration committee said: “We view this adjustment as discretionary in the extreme. We do not intend that this reduction calculation should become embedded in policy.” Four fatalities related to the company's operations during the year also meant discretion was applied to the annual bonus scheme, causing the figure awarded to Looney to be reduced 3.2% or £78,329.
What’s in the new remuneration policy? The existing pay framework, which was approved in 2020 with 96.6% of votes in favour, serves as the basis for the new policy. Directors currently have to defer 50% of their annual bonus in shares, but those who have met their minimum shareholding requirement will be able to reduce this to 33%. The new policy also proposes fine-tuning performance measures to align more closely with BP’s strategy.
What’s the view of voting agencies? Glass Lewis calls the bonus discretion used in the wake of the four fatalities as inadequate and recommends shareholders vote against the remuneration report.
How did last year’s AGM go? The directors’ remuneration report received the support of 94.36% of votes cast. The company’s net zero strategy got 88.5% of votes in favour and a climate-related resolution tabled by green lobby group Follow This got 14.86% of votes.
How’s the company doing on diversity? There are six women out of 13 directors. Three members of the board identify as being from a minority ethnic background.
Is there a climate-related vote? The latest resolution tabled through Follow This calls for the company to set and publish targets that are consistent with the goals of the Paris Climate Agreement. BP said such a move would encroach on the board’s accountability to set the company’s strategy and was also simplistic and disruptive.
When: 11am, Wednesday 3 May.
Where: QEII Centre, Broad Sanctuary, Westminster, London SW1P 3EE.
How to participate: Last year’s event took place in Manchester, the first time the Barclays AGM has taken place outside London. Next year’s gathering is due to be in Glasgow, but for 2023 the banking giant has returned to the capital. This will be a hybrid event, with shareholders able to attend electronically using an online platform. The deadline for the return of proxy voting forms is 11am, Friday 28 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 2022? Total income of £25 billion rose 14% year-on-year, with momentum across all operating divisions. Credit impairments of £1.2 billion, which compared with the £653 million release of bad debt charges the previous year, resulted in bottom-line profits falling 14% to £7 billion. Return on tangible equity fell to 10.4% from 13.1% and the bank improved its capital ratio buffer to 13.9%. The overall dividend for 2022 came to 7.25p a share, including 5p a share paid on 31 March. Share buybacks of £1 billion announced in relation to 2022 trading brought the capital return equivalent to 13.4p a share.
How have shares performed? Down 18% to 158.5p (152.9p on Thursday).
How much is the boss paid? Fixed pay for C.S. Venkatakrishnan (known as Venkat) has been increased for this year by 3.4% to £2.875 million, significantly lower than the average pay rise for the wider workforce and keeping the total compensation opportunity well below the banking peer group. Venkat’s total remuneration for 2022 amounted to £5.2 million after the annual bonus scheme paid 75.4% of the maximum opportunity worth £1.9 million. On the financial measures used in the bonus, profit before tax provided a 40.8% outcome out of 50% and the cost/income ratio provided a 3.6% outcome out of 10%. There was no vesting of long-term incentives as Venkat was not an executive director at the grant date in 2020.
Why is the company using downward discretion? An adjustment of £500 million has been applied to the overall bonus pool to reflect risk and control issues. This comes after Barclays issued $17.7 billion more securities than permitted by American regulators, resulting in the restatement of 2021 financial statements and adversely impacting 2022 performance. The bonus pool for 2022 stood at £1.79 billion, compared with £1.945 billion the year before.
How are executive directors impacted? The aggregate hit is just over £1 million. This reflects 2022 annual bonus awards being reduced by £645,000, including £403,000 for Venkat. The 2020-2022 LTIP vesting outcome for Tushar Morzaria, who stepped down in April 2022 after eight years as group finance director, was 5% less than it might have been. Discretion was also applied to his 2019-2021 LTIP outcome. Morzaria’s total remuneration for 2022 amounted to £3.9 million, including variable pay of £3.34 million.
What’s the view of voting agencies? Glass Lewis is concerned by former finance director Morzaria’s 2020 LTIP vesting outcome. It said: “Specifically, we believe shareholders could reasonably have expected the committee to further reduce this award to better reflect the financial and reputational impact of the risk and control issues over the period.” The agency has recommended shareholders vote against the annual remuneration report.
What’s in the new remuneration policy? The current policy was approved by shareholders at the 2020 AGM with 96.29% votes in favour. The remuneration committee believes the policy is operating effectively, with the only material change being to simplify the shareholding requirements for executive directors.
How did last year’s AGM go? The annual remuneration report was approved with 89.03% of votes in favour.
How’s the company doing on diversity? Board gender diversity was 38% female at the end of 2022, short of the company’s 40% target. Two directors representing 15% of the board were from a minority ethnic background.
When: 2.30pm, Thursday 27 April.
Where: Leonardo Royal Hotel London Tower Bridge, 45 Prescot Street, London, E1 8GP.
How to participate: Proxy voting forms should be returned no later than 2.30pm, Tuesday 25 April, with the deadline for the pre-submission of questions being the close of business on Monday 24 April. A webcast of the meeting will be accessible via the company’s website. More AGM details can be found here.
Who’s in the chair? Former Volvo chief executive Leif Johansson is hosting his final AGM, having led the board for 11 years. He will be succeeded by non-executive director Michel Demaré, who is the ex-finance boss of industrial conglomerate ABB and the former chair of agricultural science business Syngenta.
How did the company do in 2022? Revenues increased 25% to $44.35 billion (£35.4 billion), with growth coming from all therapy areas and from the addition of rare diseases specialist Alexion. Core earnings per share increased 33% to $6.66. A second interim dividend of $1.97 per share (162.8p) was paid on 27 March, making a total dividend for 2022 of $2.90.
How have shares performed? Up 30% to 11,218p (11,916p on Thursday).
How much is the boss paid? A 4.5% pay rise has increased Pascal Soriot’s base salary to £1.43 million. His single figure remuneration for 2022 came to £15.32 million, the fourth year in a row that the chief executive’s realised pay has topped £15 million. This year’s total included cash and shares worth £3.13 million after the annual bonus scheme awarded 92% of the maximum opportunity. Performance Share Plan awards granted to senior leaders in 2020 vested at 97% of the maximum, amounting to £10.5 million for Soriot with a two-year holding period for these shares. Astra’s remuneration committee said the outturn reflected overachievement in every target and a three-year total shareholder return of 58%, pointing out that £3 million of Soriot’s realised pay was attributable to share price increases.
How did last year’s AGM go? The directors’ remuneration report was approved with a 92% vote in favour.
What’s the view of voting agencies? Glass Lewis recommends shareholders vote in favour of the annual remuneration report.
Why the special resolution on new Articles of Association? Proposed changes include an increase in the maximum permitted number of board members from 14 to 16. This is being done to ensure sufficient flexibility for transition periods, particularly as four of Astra’s non-executive directors are due to reach the recommended nine years’ tenure at the same time. The aggregate cap on non-executive directors’ fees is also being increased to £3 million, having been £2.25 million since 2010. The new articles also simplify the means of providing notices to shareholders and limit postal delivery of notices to addresses in the UK, while also removing the requirement to publish notices in Swedish newspapers.
How’s the company doing on diversity? Women comprise 52.9% (approximately 43,900) of Astra’s global workforce and 35.7% identify as an ethnic minority. There are five female directors, equivalent to 38% of the board total, slightly below the 40% recommendation of the FTSE Women Leaders Review. Four board members identify as an ethnic minority.
When: 2.30pm, Wednesday 3 May.
Where: Sofitel London Heathrow, Terminal 5, London Heathrow Airport, TW8 2GD.
How to participate: The Lumi AGM website will enable shareholders to watch and listen to the meeting, ask questions of the board and to submit votes. The deadline for shareholders to submit questions in advance of the meeting is 5pm, Monday 1 May while proxy voting instructions must be received by 2.30pm, Friday 28 April. More AGM details can be found here.
Who’s in the chair? 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 2022? Turnover rose 19% to £29.3 billion, with specialty medicines up 37%, vaccines 17% higher and general medicines up 5%. Adjusted earnings per share from continuing operations was 139.7p compared with 110.3p in 2021. A fourth quarter dividend of 13.75p worth £555 million was paid yesterday (Thursday), bringing the total for the year to 61.25p a share or £2.5 billion. The expected dividend for 2023 is 56.5p a share.
How have shares performed? Down 10% to 1,437.6p (1,522.4p on Thursday).
How much is the boss paid? Emma Walmsley has received a 4% pay rise for 2023, taking her salary to £1.31 million. Total remuneration for 2022 amounted to £8.45 million, which the company said reflected an excellent operating performance and the successful listing of consumer healthcare arm Haleon (LSE:HLN) in Europe’s largest demerger in over 20 years. The total figure included cash and shares worth £3.1 million after the annual bonus scheme paid 83% of the maximum opportunity equivalent to 250% of salary. The vesting of 52% of the 2020 Performance Share Plan generated a figure of £3.67 million.
How did last year’s AGM go? A significant minority - 38.24% - voted against GSK’s new three-year remuneration policy after the company raised the maximum annual bonus opportunity from 200% to 300% of base salary in order to reward “truly exceptional performance”. The annual remuneration report got 91.05% of votes in favour.
How has GSK responded to the dissent? The remuneration committee engaged with major shareholders following the vote but continues to believe that incentivising outperformance against stretching targets will create long-term value for shareholders. It is comfortable that no further change is required to the annual bonus plan.
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? When Julie Brown becomes chief financial officer in May, female board representation will stand at 36% and the company will have one of the very few all-female executive teams running a FTSE 100 company. It also aims to restore board gender diversity to meet or exceed 40% by 2024. Two members of the board are from ethnically diverse backgrounds.
London Stock Exchange
When: 10.30am, Thursday 27 April.
Where: Butchers’ Hall, 87 Bartholomew Close, London EC1A 7EB.
How to participate: The meeting is in-person only. Proxy voting instructions should be returned no later than 10.30am, Tuesday 25 April and questions in advance of the meeting should be sent to firstname.lastname@example.org. More AGM details can be found here.
Who’s in the chair? Former Experian chairman and chief executive Don Robert has been in the role since May 2019.
How did the company do in 2022? Total income rose 5.7% to £7.43 billion, with underlying growth of 6.6% at the upper end of 5-7% medium-term guidance after improvement across the divisions of data and analytics, capital markets and post-trade. Operating profit rose by 19.5% to £2.7 billion and earnings per share by 16.7% to 317.8p. A dividend of 75.3p a share is due to be paid on 24 May, leaving the total for the year 12.6% higher at 107p.
How have shares performed? Up 2% to 7,136p (8,020p on Thursday).
How much is the boss paid? David Schwimmer’s salary is unchanged for this year at £1 million. His total remuneration for 2022 amounted to £4.7 million, which included an annual bonus of £1.4 million based on 64% of the maximum opportunity. Half of this award is deferred into shares for a period of three years.. The vesting of long-term incentives accounted for just over £2 million of Schwimmer’s overall remuneration figure.
Is the remuneration policy due for renewal? The company is still working on the integration of Refinitiv and is in the very early stages of its strategic partnership with Microsoft, meaning the remuneration committee has decided to roll forward the current policy for a further year. It intends to present a new policy for approval at the 2024 AGM.
How did last year’s AGM go? The annual remuneration report got the support of 97.93% of votes cast. The previous year’s report was opposed by 23% after Schwimmer received a big pay rise to reflect his increased responsibilities since the Refinitiv acquisition.
What’s the view of voting agencies? Glass Lewis recommends shareholders support the annual remuneration report.
How’s the company doing on diversity? Female representation on the board exceeded 40% at the end of 2022. There are also two directors from minority ethnic backgrounds.
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.