Your vote counts: the lowdown on Micro Focus and Beazley ahead of AGMs

Neither of these mid-cap companies is setting the market alight right now, but will there be fireworks at their shareholder meetings? 

A bonus for the boss of Beazley (LSE:BEZ) worth 300% of his salary will be under shareholder scrutiny when the AGM of the FTSE 250-listed specialist insurer takes place next week.

Adrian Cox, who took the helm in April, got the £1.4 million cash and shares award as a result of the company’s strong financial performance and 28% increase in share price in 2021. It amounted to 75% of the chief executive’s maximum opportunity and is part of an annual pay report recommended for support by proxy voting agency Glass Lewis.

Fellow FTSE 250 stock Safestore Holdings (LSE:SAFE), meanwhile, has suffered another AGM protest over the controversial 2017 long-term incentive scheme that has just landed a £16 million shares windfall for chief executive Frederic Vecchioli.

As we reported this month, the scheme continues to be heavily criticised despite the awards being based on a spectacular period of growth for the self-storage company.

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Wednesday’s AGM saw 28% of votes go against the company in the advisory vote on the annual remuneration report. Chairman David Hearn said afterwards: “The board appreciates that the 2017 remuneration policy still continues to divide opinion amongst some shareholders, even though it was voted through in 2017.

“Following recent shareholder engagement, it is understood that some shareholders who voted against the 2017 remuneration policy at its inception have a policy to vote against all future remuneration reports that reflect the subsequent execution of it.”

Beazley

When: 2.30pm, Friday 25 March.

Where: 22 Bishopsgate, London, EC2N 4BQ.

How to participate: Shareholders wishing to attend are asked to register in advance. Proxy voting instructions are required no later than 2.30pm on Wednesday 23 March. More details on the AGM can be found here.

Who’s in the chair? Nationwide chairman and former Lloyds Banking Group director David Roberts.

How did the company do in the year to 31 December? Gross written premium growth of 30% and a combined operating ratio of 93% resulted in a robust profit of $369.2 million (£282.9 million), compared with a loss of $50.4 million the previous year. The Lloyd’s of London insurer saw good growth across all its lines of business, with particularly strong rate improvement in the cyber market. The board of the FTSE 250-listed company reinstated the dividend with an award for 2021 of 12.9p a share, which will be payable on 30 March.

How have shares performed? Up 28% to 466.3p (412.4p on Thursday).

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How much is the boss paid? Adrian Cox, who became chief executive in April, saw his total remuneration jump to just over £2 million from the previous year’s £485,000, when he was chief underwriting officer and received no bonus. The year’s strong financial performance meant Cox was entitled to 300% of salary, equivalent to 75% of the total opportunity and worth £1.4 million. A portion of the award has been deferred into shares for three years. His basic salary is increasing this year by 3.5% to £525,250.

What’s the view of voting agencies? Glass Lewis notes 2021 salary increases of 30% for Cox after his promotion and 14% for chief financial officer Sally Lake to reflect her increased responsibilities. However, it notes that Cox’s salary is in line with his predecessor and regards the rise for Lake as reasonable, meaning no shareholder action is required. It recommends that they support the advisory vote on the annual remuneration report.

How did last year’s AGM go? The remuneration report got 99.6% of votes in favour.

How is the company doing on diversity? Female representation on the board is four, or 40%, above the minimum Hampton-Alexander review target of 33%. The company has not made reference to the Parker review, which looks for at least one director from an ethnic minority background on the board by the end of 2024.

Micro Focus International

When: 3pm, Wednesday 30 March.

Where: The Lawn, 22-30 Old Bath Road, Newbury, Berkshire, RG14 1QN.

How to participate:Micro Focus International (LSE:MCRO) shareholders are invited to submit questions in advance of the AGM, with responses via email or the company’s website. Proxy voting instructions are required by 3pm, Monday 28 March. More details on the AGM can be found here.

Who’s in the chair? Greg Lock has been chairman since February 2020, having previously spent 30 years at IBM.

How did the company do in the year to 31 October? Revenues of $2.9 billion (£2.2 billion) improved the year-on-year decline from 10% in 2020 to 5%. Underlying earnings fell 12% to $1.04 billion (£8 billion) but the enterprise software provider reported progress in repositioning its product portfolio to focus on growth opportunities. The final dividend of 20.3 cents a share is due to be paid on 21 April and  has increased the total dividend by 87.7% to  29.1 cents, consistent with the FTSE 250 company’s policy of five times earnings cover. 

How have shares performed? Up 65% to 356.7p (on Thursday 391.3p).

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How much is the boss paid? The basic salary of Stephen Murdoch, who joined the company in 2012 and has been chief executive since 2018, has been unchanged for this year at £850,000. His total remuneration for 2020/21 came to £1.7 million after the company’s performance on business transformation objectives contributed to a bonus of £733,000, equivalent to 57% of the maximum opportunity. 

What’s the view of voting agencies? Glass Lewis notes that new finance boss Matt Ashley received a cash buy-out payment of £450,000 to offset the bonus he forfeited when joining the company. He was also granted more than 300,000 of shares, which are subject to performance over three years. Glass Lewis is sceptical of joining awards but recognises their occasional necessity in facilitating recruitment. Overall, it recommends that shareholders vote in favour of the remuneration report.

How did last year’s AGM go? The advisory vote on the annual remuneration report attracted 96.7% of votes in favour.

How is the company doing on diversity? At 40%, the board meets the recommendations of the Hampton-Alexander review. Glass Lewis said the company had failed to outline an approach to meet the 2024 recommendation of the Parker review to have at least one director from an ethnic minority background.