Half-a-dozen FTSE 100 companies hold their AGMs in the coming weeks. Find out about the big votes and which way shareholders might swing.
A new incentive plan for NatWest executives aims to bring the state-backed lender more into line with its peers, but voting advisory group Glass Lewis has recommended shareholders vote against the updated three-year remuneration policy.
There’s an opportunity for shareholders to hear about the pay changes before they cast their votes because the company is hosting a virtual shareholder event on Thursday 21 April.
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Climate transition progress reports will be in focus at the AGMs of London Stock Exchange and Glencore as Glass Lewis has concerns about transparency and director accountability.
AstraZeneca (LSE:AZN) and British American Tobacco (LSE:BATS) suffered big protests over pay at their events last year, but Glass Lewis is content with how they have responded to the dissent. Astra boss Pascal Soriot got £13.9 million in total last year, with £9 million coming from a long-term incentive scheme that is due to vest in 2024.
London Stock Exchange
When: 10.30am, Wednesday 27 April.
Where: Butchers’ Hall, 87 Bartholomew Close, London EC1A 7EB.
How to participate: Shareholders are requested to bring photo ID if they are planning to attend the event. Proxy voting forms need to be returned by 10.30am on Monday 25 April. More details on the AGM 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 2021? Strong revenues growth across all divisions, cost synergies and the benefits of a long-term debt refinancing resulted in pre-tax profits rising 26.8% to £2.3 billion. Adjusted earnings lifted 46.5% to 286.7p a share. A final dividend of 70p a share is 27% higher than a year ago and is due for payment on 25 May, taking the total for the year to 95p a share.
How have shares performed? Down 23% to 6,930p (8,116p on Wednesday 13 April).
How much is the boss paid? David Schwimmer’s salary jumped by 24% to £983,000 as a result of his increased responsibilities following the acquisition of data business Refinitiv. His annual bonus came to £1.6 million, representing 72% of the maximum opportunity. The £3.6 million vesting of long-term shares granted in 2019 took total remuneration to £6.4 million.
How did last year’s AGM go? The big pay rise for Schwimmer resulted in 23% of votes going against the annual remuneration report as some shareholders told the company they would have preferred to see the increase take place in stages.
Is there a climate-related vote? Resolution 4 is an advisory vote to approve the company’s Climate Transition Plan. This includes a strategy for achieving climate commitments and emissions reductions and also describes how the company is integrating climate change considerations into its products and services.
What’s the view of voting agencies? With no changes to base salaries this year, Glass Lewis recommends support for the remuneration report. However, it believes shareholders should abstain from the advisory vote on the climate transition plan. While there are no areas of significant concerns with the plan, it is unhappy about a lack of disclosure on how the company intends to use and interpret the vote in its strategy-setting process.
How is the company doing on diversity? There’s a near equal gender split on the board, falling to 33% for women in senior management roles. It meets the Parker review recommendation to have one director from an ethnic minority background on the board.
When: 12 noon (central Europe time), Thursday 28 April.
Where: Theater-Casino Zug, Artherstrasse 2-4, Zug, Switzerland.
How to participate: To vote on the resolutions, shareholders should return proxy forms by 12 noon central Europe time on Tuesday 26 April. Questions for the board should be submitted to email@example.com by the same deadline. More details on the AGM can be found here.
Who’s in the chair? Kalidas Madhavpeddi was appointed on 30 July. He has over 40 years of experience in the mining industry, including as CEO of China Molybdenum’s operating arm.
How did the company do in 2021? The mining company’s focus on energy transition metals contributed to adjusted earnings rising 84% to $21.3 billion (£16.3 billion). It also benefited from “ideal” trading conditions for its marketing arm. Net debt reduced by $9.8 billion (£7.5 billion) to $6 billion (£4.6 billion) and the company declared $2.8 billion (£2.1 billion) of shareholder returns that included a $1.6 billion (£1.2 billion) base distribution and a $500 million (£383.5 million) special award. For 2022, Glencore has recommended a $0.26 base distribution worth $3.4 billion (£2.6 billion) payable in two equal instalments.
How have shares performed? Up 61% to 374.95p (530.10p on Wednesday).
How much is the boss paid? Gary Nagle succeeded Ivan Glasenberg in July and was appointed on a salary of $1.8 million (£1.4 million), some 24.4% higher than his predecessor. There is no change in the figure for 2022. Nagle’s total remuneration for 2021 came to $3.2 million (£2.5 million) after he secured a $2.1 million (£1.6 million) annual bonus. Four fatalities within the company during the year meant downward discretion was applied to the award, reducing it from 98.5% of the maximum opportunity to 93.6%.
What happened at last year’s AGM? The remuneration report got 91.3% of votes in favour but the company’s binding vote on remuneration policy, which takes place every three years, saw 25.8% of votes against. In response to criticism about Nagle’s arrangements, Glencore said his pay was positioned “competitively but not excessively” versus FTSE 30 companies and that it contained an appropriate mix of rewards for short and long-term performance.
Is there a climate-related vote? Having received 94% support for its climate transition action plan at 2021’s AGM, the company is putting a progress report to an advisory vote. Total carbon emissions decreased by 5% compared to 2020, a 25% reduction on the 2019 baseline but Glencore expects a rise this year due to the unwinding of demand-led coal production cuts. It remains committed to emissions reductions of 15% by 2026 and 50% by 2035.
What’s the view of voting agencies? Glass Lewis is concerned that the board is seeking shareholder approval on climate through an up/down vote, thus removing some level of accountability from directors. It said corporate governance dictates that shareholders should elect the board and that the board should oversee management and the execution of the strategy of a company. “Shareholders can then hold board members accountable for their failure to execute a strategy that serves shareholders’ best interests through the election of directors.” Glass Lewis recommends shareholders vote against the climate progress report but support the annual remuneration report.
How is the company doing on diversity? Glencore’s gender split at board level is above the recommended 33% but 15% for senior management positions. During the year it developed its first diversity and inclusion strategy. The company meets the Parker review target for one director from an ethnic minority background.
When: 2pm, Thursday 28 April.
Where: Gogarburn, Edinburgh EH12 1HQ.
How to participate: Shareholders will be able to attend the AGM in person and the meeting is also being broadcast live via a Zoom webinar. A “live” virtual shareholder event is being held a week before the AGM at 5pm on Thursday 21 April, providing shareholders with the chance to engage with board members and ask questions prior to voting on this year’s resolutions. The proxy voting deadline is 2pm, Tuesday 26 April. More details on the AGM can be found here.
Who’s in the chair? Howard Davies, the former chairman of the Financial Services Authority and deputy governor of the Bank of England, has been in the role since September 2015.
How did the company do in 2021? The state-backed lender returned to profitability and distributed more than £3.8 billion of capital to its shareholders, including £1.7 billion to the taxpayer. The operating profit of £4 billion reflected impairment releases of £1.3 billion as well as growth in net lending of £7.8 billion in 2021 and the removal of a further £256 million of costs. A final dividend of 7.5p a share is due to be paid on 4 May along with a share buyback programme during the first half of this year.
How have shares performed? Up 35% to 225.7p (217.4p on Wednesday).
How much is the boss paid? Alison Rose’s salary was increased earlier this month by 2% to £1.12 million, the first change since her appointment in 2019. Her total remuneration for 2021 came to £3.6 million after the payment of a fixed share allowance equivalent to £1.1 million and the vesting of shares granted in 2019 worth £1.2 million.
Why is the remuneration policy being updated? The current policy was introduced in 2017 and renewed at the 2020 AGM. It supported a culture of prudent risk taking, with significantly restrained variable pay in return for more consistent pay outcomes. But with the bank nearing normalisation and its pay policies increasingly out of line with standard market practice, the bank has decided to update the policy now rather than the next triennial review in 2023.
What’s changing? In a drive to incentivise its executives, the new policy will see maximum variable pay set at 100% of base salary for the annual bonus and 150% of base salary for restricted share plan (RSP) awards. This increases the total compensation opportunity by 19% for Rose and 13% for finance boss Katie Murray. NatWest said the move brings them closer to, but still below, the average total expected to be paid by other major UK banks.
What’s the view of voting agencies? Glass Lewis is opposed to the remuneration policy after questioning the move away from a long-term incentive plan (LTIP). It adds that RSPs are uncommon among the company's peers, the majority of which operate standard LTIPs “with clearly defined and quantifiable performance criteria measured over three years.” The agency said: “We are concerned by the increase in overall incentive opportunity and the introduction of an RSP absent a compelling strategic rationale for this type of award structure.” It recommends support for the annual remuneration report.
How did last year’s AGM go? The remuneration report was backed with more than 99% of votes in favour.
Is there a climate-related vote? Shareholders are being asked to approve the company’s climate strategy, including an ambition to at least halve the climate impact of its financing activity by 2030 and to be net zero by 2050. It intends to publish a climate transition plan in next year’s annual report and for annual updates over the following years. Glass Lewis has recommended shareholders vote in favour of the Say on Climate resolution.
How is the company doing on diversity? At the end of 2021 the board exceeded the recommendation of the FTSE Women Leaders Review for 33% female representation. It also met the requirements of the Parker Review for at least one director from an ethnic minority background.
British American Tobacco
When: 11.30am, Thursday 28 April.
Where: Hilton London Bankside, 2-8 Great Suffolk St, London, SE1 0UG.
How to participate: Shareholders unable to attend the meeting can submit questions online at bat.com/agm by 20 April. It will endeavour to publish responses before the proxy voting deadline of 11.30am on Tuesday 26 April. More details on the AGM can be found here.
Who’s in the chair? Luc Jobin, the former chief executive of Imperial Brands Canada, has been chairman since April 2021 and non-executive director since July 2017.
How did the company do in 2021? Revenues fell 0.4% to £25.7 billion but the figure from new categories rose 51% to £2.2 billion. Constant currency adjusted earnings per share growth of 6.6% was at the top end of its guidance, with nearly £10 billion of net cash generated from operating activities. A dividend of 217.8p a share has increased 1% and will be paid in four instalments of 54.45p a share on 4 May, 17 August, 10 November and 2 February. It has pledged a £2 billion share repurchase programme for 2022.
How have shares performed? Up 1% at 2,733p (3,263.5p on Wednesday).
How much is the boss paid? Total remuneration for Jack Bowles came to £7.5 million last year. As well as his basic salary of £1.3 million he got £2.8 million of cash and shares from a short-term bonus scheme where he achieved 86% of the maximum opportunity. A further £2.8 million came from the vesting of long-term incentives awarded in 2019.
How did last year’s AGM go? About 38% of shareholders voted against the remuneration report, with their discontent focused on fixed pay increases awarded in 2020 and 2021.
How has the company responded? Following consultation with shareholders, its new remuneration policy strengthens the focus of incentive plans on revenue growth and improving profitability in new categories. No material changes have been proposed to the policy, which is subject to a binding shareholder vote every three years.
What’s the view of voting agencies? Glass Lewis believes shareholders can be satisfied with the company’s response to last year’s AGM dissent, including the decision to freeze executive salary levels for 2022. It recommends support for the separate resolutions on the annual remuneration report and the remuneration policy.
Is there a climate-related vote? There’s no vote but the annual report includes discussion on the company’s commitment to net zero value chain emissions by 2050.
How is the company doing on diversity? Board-level gender diversity was 40% at the end of 2021. Its diversity and inclusion ambitions for 2025 include having women in 40% of senior leadership team roles and 45% of management roles. It meets the recommendation to have at least one board director from an ethnic minority background.
When: 2.30pm. Friday 29 April.
Where: Royal Lancaster London Hotel, Lancaster Terrace, London W2 2TY.
How to participate: Shareholders are requested to register their questions in advance and can do so through the company’s website by the close of Tuesday 26 April. Proxy voting forms should be returned no later than 2.30pm on Wednesday 27 April. A webcast of the meeting will be accessible via the company’s website. More details on the AGM can be found here.
Who’s in the chair? Leif Johansson was chief executive of Volvo from 1997 to 2011 and prior to that at Electrolux. He has been Astra’s chairman since June 2012, and while his tenure is longer than the recommended nine years, the 70-year-old is standing at the AGM for another year in order to facilitate succession planning.
How did the company do in 2021? Total revenues including Covid-19 vaccines increased 41% to $37.4 billion (£28.6 billion) as five of its 13 blockbuster medicines crossed new sales thresholds. It also completed the acquisition of rare disease specialist Alexion. Core earnings per share rose 32% on a constant currency basis to $5.29 (£4.05) and the company declared a total dividend of $2.87 a share. This included the recent payment of a second interim dividend of $1.97 a share.
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How have shares performed? Up 18% at 8,678p (10,510p on Wednesday).
How much is the boss paid? Pascal Soriot’s salary has increased 3% for this year to £1.37 million. His total remuneration for 2021 came to £13.86 million, reflecting £9 million from a long-term incentive scheme that will vest in 2024. He also got cash and shares worth £3.1 million based on 95% of the maximum opportunity under a short-term bonus scheme.
What happened at last year’s AGM? The resolution on a new remuneration policy was opposed by almost 40% of votes. In a year when Soriot’s single figure remuneration came to £15.9 million, Astra acknowledged some shareholder concern around the scale of the pay opportunity in a UK context. However, Astra said a more common complaint was its decision to seek a new remuneration policy at two consecutive AGMs, and in a challenging period because of the pandemic. After last year’s AGM, Astra highlighted a “remarkable turnaround” in performance since Soriot’s appointment, resulting in a total shareholder return close to 300% over the eight years and 77% over the last three years.
How has it responded to the vote? Astra said it is committed to a period of stability in its approach to executive remuneration. The current pay policy will remain in effect until 2024 and it has not made any material changes to the structure of executive rewards in 2022, beyond an increase in base pay in line with the wider UK workforce.
What’s the view of voting agencies? Glass Lewis said Soriot’s remuneration outpaced others at country and industry level, but notes that this is largely due to long-term incentive awards which vested in the past fiscal year. It also highlights that new chief financial officer Aradhana Sarin has been appointed on a base salary of £850,000, some 7.9% higher than her predecessor. However, given Sarin’s recent and relevant experience at Alexion it says this does not warrant shareholder action. In light of the company’s other assurances following last year’s AGM, it recommends support for the annual remuneration report.
Is there a climate-related vote? There’s no vote but Astra says it is one of only seven companies worldwide (and the only pharmaceutical firm) to have its climate targets verified by the Science Based Targets initiative.
How is the company doing on diversity? Following Sarin’s appointment there are five women on the board, or 38% of the total. At the end of 2021, women represented 41.8% of the senior executive team. The company also meets the recommendation of the Parker review to have at least one director from an ethnic minority background.
When: 11am, Friday 29 April.
Where: Queen Elizabeth Hall, Southbank Centre, Belvedere Road, London SE1 8XX.
How to participate: Shareholders wishing to participate electronically should view the webcast via the Lumi AGM website in order to vote and ask questions. Proxy voting forms need to be returned no later than 11am Wednesday 27 April. More details on the AGM can be found here.
Who’s in the chair? Former Prudential chief executive Mark Tucker has been in the role since October 2017.
How did the company do in 2021? Reported profit before tax rose $10.1 billion (£7.7 billion) to $18.9 billion (£14.5 billion), driven by a net release of expected credit losses and other impairment charges. Revenues fell 2% to $49.6 billion (£38 billion), primarily due to the impact of lower interest rates and a decrease at the Markets and Securities arm against a strong comparative period. The net interest margin of 1.20% was down 12 basis points from 2020, but with stabilisation in the second half of 2021. A second interim dividend of $0.18 a share, which will be paid on 28 April, made a total for 2021 of $0.25 a share.
How have shares performed? Up 18% to 448.65p (518.2p on Wednesday).
How much is the boss paid? The base salary for Noel Quinn increased in March by 3.5% to £1.34 million. He also gets a fixed pay allowance of £1.7 million, released in shares over five years. This allows the bank to maintain competitive pay levels and remain compliant with EU regulations on the ratio of variable to fixed pay. Quinn also got cash and deferred shares worth £1.59 million based on 57.3% of the maximum available from a short-term bonus scheme, bringing his total remuneration for the year to £4.9 million.
Is there a change in the remuneration policy? The last triennial vote on policy in 2019 got 97% support and subsequent AGMs have seen strong votes in favour of the 2020 and 2021 remuneration reports. The updated policy due for approval at this year’s AGM contains no changes to the fixed or variable pay structure and approach.
What’s the view of voting agencies? Glass Lewis recommends support for the advisory vote on the remuneration report and the binding vote on the new remuneration policy.
Is there a climate-related vote? A special climate change resolution, which focused on HSBC’s plans for a net zero aligned finance strategy by 2050, received 99% support at last year’s AGM. An update on progress appears in this year’s annual report.
How is the company doing on diversity? Board-level gender diversity was 38% at the end of 2021 but will drop below the recommended 33% because of the retirements of Pauline van der Meer Mohr and Irene Lee after the AGM. It meets the Parker review recommendation for at least one director from an ethnic minority background.
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