Interactive Investor

Your vote counts: more AGM protests rock mid-cap pair

28th May 2021 09:34

Graeme Evans from interactive investor

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AGM season slows down next week, but shareholders have the chance to vote at two big meetings in the days ahead.

Few companies have endured as much shareholder dissent over the years than FTSE 250-listed Playtech (LSE:PTEC), with this week's AGM no different for the gambling technology firm.

A new three-year remuneration policy, aimed at drawing a line under the poor voting record, still only received support from 75% of votes cast by shareholders at Wednesday's meeting.

The changes included a 20% cut in the salary of CEO Mor Weizer to £800,000, as well as the deferral of a greater slice of his bonus payments into shares, and a reduction in the pay-out for on-target performance to 50% of the maximum from 60% previously.

Before the meeting, remuneration committee chairman Ian Penrose said that it had been a “difficult, lengthy and challenging process” to find an appropriate level of pay for executives including Weizer, whose single remuneration figure was £1.9 million last year.

This week's non-binding vote on the company's annual remuneration report for 2020 fared even worse, with approval of just under 70%, while there were big protests against the re-election of several non-executive directors, including interim chair Claire Milne.

Prior to the AGM, voting advisory group Glass Lewis recommended voting against Milne because of the company's failure to ensure at least a third of directors are female.

Incoming chair, the former 888 Holdings (LSE:888) boss Brian Mattingley, has been handed the task of rebuilding shareholder relations after this latest AGM blow.

The company said on Wednesday it will consult with shareholders who voted against this year's resolutions to understand their concerns before reporting back. Two-thirds of votes were cast against Playtech's pay report last year and it was only narrowly approved the previous year.

Aston Martin suffers shareholder backlash

Luxury car maker Aston Martin Lagonda (LSE:AML), another FTSE 250-listed stock, was also the subject of a sizeable shareholder protest at its annual meeting this week.

Just over 18% of votes cast were against the remuneration report after Institutional Shareholder Services (ISS) flagged a “material disconnect” between bonuses for executive directors and performance, particularly as the company took government support.

Chief executive Tobias Moers, who was appointed last May on a salary of £850,000, was awarded a bonus of £142,000 representing 20% of his maximum opportunity.

Shareholders also sent a message on boardroom diversity by voting against the re-election of executive chairman Lawrence Stroll. There is currently one woman out of eight board directors, a situation that Stroll has pledged to address in the coming year.

The F1 motor racing financier, who came on board in April last year as part of a consortium's £688 million cash injection, saw 16.7% of votes go against his re-appointment.

The pace of the AGM season slows next week, but FTSE 100 company Informa (LSE:INF) faces another difficult meeting due to ongoing concerns about a new executive bonus scheme. 

Informa (Thursday, 3rd June)

The pay controversies at FTSE 100-listed exhibitions group refuse to die down after Glass Lewis recommended shareholders oppose this year's remuneration report as well as the re-election of three directors behind the introduction of a new executive pay scheme.

The voting advisory group said not enough had been done to address concerns raised at December's general meeting, when 40% of shareholders cast their votes against the company's new remuneration policy and equity revitalisation plan (ERP).

Informa has replaced a long-term incentive scheme with one more straightforward, with smaller pay-outs but less onerous targets. As part of awards granted for the next three years, the chief executive and finance director need to ensure the share price is above a certain level and to hold shares or options equal to a percentage of their base salary.

The new scheme sought to address concerns raised at the 2020 AGM last June, when only 65% of shareholder votes were cast in favour of the remuneration policy due to issues over pension contributions and the lack of a post-employment shareholding requirement. 

Informa, which bought UBM in 2018 and owns brands including Lloyd's List and the Philosophical Magazine, said the new plan offered greater flexibility for its pandemic recovery and avoided the limitations that multi-metric long-term incentives might present.

John Rishton, who takes over as chairman at next week's AGM, told shareholders in a letter last week that the Glass Lewis recommendation had the potential to create significant instability. He said the advisory group's opposition failed to take into account the company's extensive consultation with 30 of the group's largest shareholders.

He said: “We are both shocked and disappointed by the advice of Glass Lewis and with the rationale provided. We believe it is disproportionate and precipitous, and we urge all shareholders not to follow the recommendations.”

Glass Lewis has recommended voting against remuneration committee chairman Stephen Davidson, as well as directors Mary McDowell and Helen Owers.

Page Group (Thursday, 3rd June)

Steve Ingham has 34 years’ service with Page Group (LSE:PAGE) and in the recruitment industry, including the past 15 years as its chief executive. A wheelchair user since March 2019 following a near-fatal skiing accident, he has led efforts to make Page an inclusive workplace, whether encouraging more disabled candidates into work or improving gender and ethnic representation.

This has been recognised through a series of awards over the last year, while the company's senior management also have diversity targets linked to their remuneration.

Ingham was paid a total of £1.2 million after a year in which the Covid-19 pandemic caused operating profits to slide by 90.1% to £17 million. His remuneration figure includes a base salary of £600,000 and compares with a total of £3.77 million the previous year, when variable pay amounted to £2.75 million.

In response to the pandemic, the salaries of executives were reduced by 20% in the second quarter of 2020 and discretion was exercised by reducing the award level in the executive share incentive plan from 28% to 16.5% of the maximum opportunity.

The company has attracted strong support in the past for its remuneration report, with advisory group Glass Lewis recommending shareholders vote in favour at this year's AGM.

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