Interactive Investor

Your vote counts: ex-RBS chief to host first easyJet AGM

4th February 2022 09:00

Graeme Evans from interactive investor

Former banker Stephen Hester is now chair at the budget airline. Will he get a warm welcome, or will rowdy shareholders give him a hard time about a tweak to the generous long-term incentive plan?

Shareholders have prompted publisher Future (LSE:FUTR) to revisit its pay policies after another big AGM protest saw more than 55% votes against the company's remuneration report.

The failure of Thursday's advisory vote came amid continued discontent over a new employee bonus scheme, which has the potential to award about £40 million to chief executive Zillah Byng-Thorne in three stages based on the performance of the business.

Her total for 2020/21 came to £8.8 million after her basic salary of £575,000 was bolstered by £7 million from a 2018 long-term incentive scheme tied to earnings and share price targets.

Although shareholders backed the new Value Creation Plan at last year's AGM, there were 36% of votes against. Advisory group Glass Lewis said before this week's meeting that it felt the response of the company to the dissent had been inadequate, highlighting its concerns for “extremely large pay-outs” based solely on shareholder value creation.

Future said the plan is directly aligned to shareholder interests and will only vest if the company delivers exceptional performance. However, it said it will initiate a new consultation process with shareholders after Thursday's vote.

Future is the latest FTSE 250-listed company to feel the heat on boardroom pay after smaller protest votes at WH Smith (LSE:SMWH) and Britvic (LSE:BVIC) last month. FTSE 100-listed Compass Group (LSE:CPG) also saw 32% of votes go against its remuneration policy on Thursday after it changed salary multiples on long-term incentive awards to more in line with market levels.

Three more FTSE 250 companies are in the AGM spotlight next week, including low-cost airline easyJet (LSE:EZJ). The Luton-based carrier, which didn't pay a bonus to chief executive Johan Lundgren in the last financial year, is asking shareholders to support the introduction of a new Restricted Share Plan as part of a new three-year remuneration policy.


When: 12 noon, Wednesday 9 February.

Where: Grainger (LSE:GRI) offices, Citygate, St. James’ Boulevard, Newcastle upon Tyne, NE1 4JE.

How to participate: Proxy voting forms need to be returned no later than 48 hours before the meeting. Responses to questions submitted to before the close of business today (Friday) will be published on the website before the AGM. More details on the AGM can be found here.

Who's in the chair? Mark Clare, the former Barratt Developments chief executive, has been chairman since 2017.

How did the company do in the year to 30 September? The UK's largest listed residential landlord achieved like-for-like rental growth of 1%, leading to a 27% rise in earnings per share to 12.7p. Its final dividend of 3.32p for payment on 14 February is based on a policy of distributing 50% of net rental income, leaving the total for the year 6% lower at 5.15p.

How did the company's shares perform? Up 4% to 305p (297.6p on Thursday).

How much is the boss paid? Helen Gordon, who was appointed in January 2016, received total remuneration of £1.58 million. As well as her basic salary of £499,000, she got an annual bonus of £467,000 after securing 66% of the maximum opportunity based on targets such as adjusted earnings and private rental sector income. A quarter of the bonus has been paid in shares deferred for three years. Gordon, whose basic salary increased by 2% last month, got £520,000 last year from the vesting of long-term share incentives.

What's the view of voting agencies? Glass Lewis notes the appointment of chief financial officer Rob Hudson on a basic salary of £410,000, which is 17.6% higher than the pay of predecessor Vanessa Simms. However, the agency believes no action is required by shareholders because Hudson has a “proven track record” as finance boss and interim chief executive at St Modwen. It urged the company to show constraint on future pay rises.

How did last year's AGM go? The advisory vote on the remuneration report got 92.5% of votes in favour.

How is the company doing on diversity targets? Female representation at board level is 38%, exceeding the 33% required by the Hampton-Alexander review. The company also meets the recommendation of the Parker review on ethnic diversity.

Euromoney Institutional Investor

When: 9.30am, Wednesday 9 February.

Where: Euromoney offices, 8 Bouverie Street, London EC4Y 8AX.

How to participate: Proxy voting forms need to be returned by 9.30am, Monday 7 February. More details on the AGM can be found here.

Who's in the chair? Leslie Van de Walle, who was appointed in March 2019, has been chief executive of Rexam and United Biscuits.

How did the company do in the year to 30 September? Business-to-business information services provider Euromoney Institutional Investor (LSE:ERM) benefited from strong subscriptions growth, but the impact of Covid-19 on the running of physical events left revenues 2% lower at £336.1 million. The company's dividend policy is to pay around 40% of adjusted earnings per share, a figure that increased 12% to 45.5p. The final dividend of 12.5p a share for payment on 15 February takes the total dividend to 18.2p, an increase of 60% on a year earlier.

How did shares perform in the year? Up 26% to 1,016p (916p on Thursday).

How much is the boss paid? The salary of Andrew Rashbass, who joined Euromoney after two years running the news division of Thomson Reuters, has been at £750,000 ever since his appointment in 2015. His performance in the year resulted in an annual bonus worth 97% of the maximum opportunity at £1.1 million, having waived the award last year. Targets under the 2018 performance share plan were not met and have lapsed. Rashbass's total remuneration came to just over £2 million, including a further £156,610 relating to costs from his short-term commuter assignment to the US in order to develop the group's strategy and business.

What's the view of voting agencies? Glass Lewis said shareholders should be mindful of an increase in the bonus opportunity for the finance director to 150% of base salary, not long after she received a 7% pay rise. It believes the new arrangements are reasonable relative to peers and that shareholders should vote in favour of the remuneration report.

How did last year's AGM go? The annual remuneration report was approved with 84.79% of votes in favour and the binding vote on the directors' remuneration policy got 84.6%.

How is the company doing on diversity targets? The board's gender split is 50/50, while the company also meets the Parker review target of at least one director of colour.


When: 11am, Thursday 10 February.

Where: Hangar 89, London Luton Airport, Luton LU2 9PF.

How to participate: There will be facilities for shareholders to attend the AGM electronically, including by conference call to ask questions in real time. Proxy voting forms need to be returned by 11am on Tuesday 8 February. More details on the AGM can be found here.

Who's in the chair? Former RBS and RSA chief executive Stephen Hester is hosting his first AGM. He succeeds John Barton, who held the role for nine years and passed away in early December shortly after leaving the company.

How did the company do in the year to 30 September? Total revenues fell 52% to £1.46 billion, but the low-cost airline's loss was smaller-than-expected at £1.14 billion and led to a loss per share of 166.9p. It ended the year with liquidity of £4.4 billion.

How did the shares perform in the year? Up 30% to 662.8p (627.4p on Thursday).

How much is the boss paid? The £740,000 basic salary of Johan Lundgren, who was appointed in December 2017, is staying the same for the year to September. The impact of disruption in the airline industry meant he was not paid an annual bonus in the 2021 financial year while performance targets under the 2018 long-term incentive plan were not met.

How is the company's remuneration policy changing? A new Restricted Share Plan will offer a maximum award of 125% of salary for the chief executive compared to 250% under the current long term incentive opportunity. Awards will be subject to performance underpins, including a minimum liquidity target and governance criteria. There are no other changes.

What's the view of voting agencies? Glass Lewis has raised concerns about the use of a single metric in 2021's long-term incentive plan. Awards are usually 80% related to the metrics of  headline earnings per share and return on capital employed, but easyJet has changed this to a 100% focus on total shareholder return. It said this removed the need to set financial targets in uncertain times and was in alignment with the interests of shareholders. Glass Lewis favours the use of multiple metrics, but is satisfied with the company's disclosures on the matter. It has recommended support for the resolutions on the Restricted Share Plan, the annual remuneration report and the binding vote on the three-year remuneration policy.

How did last year's AGM go? The AGM was brought forward to December 2020, prior to the end of the Brexit transition period. A number of resolutions to re-appoint directors received votes against of more than 40% due to the position of majority shareholder Stelios Haji-Ioannou, who has since seen his holding diluted as a result of September's rights issue. The remuneration report got 99.7% support and the remuneration policy 95.6%.

How is the company doing on diversity? Three out of nine directors are women and the company continues to have one director from an ethnic minority background.

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