Four FTSE 100 companies go under the microscope this month and the emotive issue of pay is top of the agenda. Should these execs get what they're after?
The £5.2 million pay package of NatWest Group (LSE:NWG) boss Alison Rose will be under scrutiny when the lender hosts a virtual shareholder event prior to its AGM later this month.
There will be an opportunity for shareholders to ask questions of board members on matters including the first annual CEO bonus since the government’s bailout in 2008. The event on 18 April gives shareholders enough time to cast their votes before the AGM a week later.
The meetings of Persimmon (LSE:PSN), Taylor Wimpey (LSE:TW.) and Entain (LSE:ENT) will have added significance as they feature binding votes on their new three-year remuneration policies, including a bigger long-term bonus opportunity for the chief executive of the betting firm.
When: 11am, Tuesday 25 April.
Where: Gogarburn, Edinburgh EH12 1HQ.
How to participate: A livestream of the AGM will be available. However, shareholders watching online won’t be able to ask questions or vote during the meeting. Proxy votes must be submitted by 11am on Friday 21 April. A live Virtual Shareholder Event is also taking place at 6pm on Tuesday 18 April, providing an opportunity for shareholders to engage with board members and ask questions before voting on AGM business. More details 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 2022? The state-backed lender lifted total income by 28.3% to £13.2 billion, reflecting volume growth, higher trading income and the impact of interest rate hikes. Pre-tax profits rose by more than a third to £5.1 billion, with a return on tangible equity of 12.3%. A final dividend of 10p a share worth £1 billion is set to be paid on 2 May, bringing distributions for the year to £5.1 billion or 53p a share after September’s special dividend and the launch of a buyback programme of up to £800 million in the first half of this year.
How have shares performed? Up 9% to 265.2p (262.3p on Wednesday).
How much is the boss paid? Alison Rose’s base salary rose 3% this month to £1.16 million, compared with an average increase for the workforce at 6.4%. Her total remuneration for 2022 came to £5.25 million, including an annual bonus of £643,000 in cash and shares based on 67.76% of the maximum opportunity. The remuneration committee said the payment under the first year of the company’s new pay policy rewarded an “impressive performance” when most targets were met or exceeded. The vesting of long-term incentives granted in 2020 accounted for £2.2 million of the final figure, representing 78% of the maximum opportunity. The annual report also reveals a bonus pool of £367.5 million, some 23% higher than 2021.
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How did last year’s AGM go? The new three-year remuneration policy, which sought to bring the bank’s pay policies closer to standard market practice, was backed with 92.75% of votes cast in favour. The annual remuneration report got 98.87% while an advisory resolution on the company’s climate strategy received 92.58%.
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? There were five female directors on the 11-strong board at the end of 2022, exceeding the FTSE Women Leaders Review’s 40% target. The company also met the Parker Review recommendation to have at least one director from an ethnic minority background.
When: 10.30am, Thursday 27 April.
Where: Crowne Plaza Gerrards Cross, Oxford Road, Beaconsfield, HP9 2XE.
How to participate: An audiocast facility will allow shareholders to follow the AGM remotely and submit questions but not vote in real-time. Proxy voting instructions must be returned by no later than 10.30am, Tuesday 25 April. More AGM details can be found here.
Who’s in the chair? Former HSBC executive Irene Dorner took on the role in February 2020 but is stepping down after this year’s AGM due to personal family reasons. She will be succeeded by Robert Noel, the former chief executive of Land Securities.
How did the company do in 2022? Revenues rose 3.2% to £4.42 billion after a slight fall in completions to 14,154 was offset by a 4% rise in the average selling price to £313,000. An improved operating margin of 20.9% resulted in pre-tax profits lifting 21.8% to £827.9 million and earnings per share by 18.3% to 18.1p. The final dividend of 4.78p a share for payment on 12 May will mean a total for the year of 9.40p, up 9.6%.
How have shares performed? Down 42% to 101.65p (113.45p on Wednesday).
How much is the boss paid? The salary of Jennie Daly, who replaced long-time boss Pete Redfern in April 2022, increased this month by 3% to £772,500. Her total remuneration for 2022 of £1.6 million included cash and shares worth £730,000 after the annual bonus scheme paid 76% of the maximum opportunity. She got £140,000 of performance shares after awards granted in 2020 vested at 32.3% of the total opportunity.
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Due to uncertain market conditions at the time of the annual report the precise weightings and final target ranges for this year’s bonus scheme have not been finalised. However, the percentage based on financial measures is set to be increased from 60% to 70% of the overall bonus opportunity.
How did last year’s AGM go? The annual remuneration report was approved with 93.73% of votes in favour.
What’s the view of voting agencies? Glass Lewis recommends shareholders support the annual remuneration report and the binding vote on the new three-year remuneration policy, which the company is renewing with minor amendments.
How’s the company doing on diversity? The company exceeds the FTSE Women Leaders Review target by having 44% female representation. It also meets the Parker Review target of having at least one person of colour on the board.
When: 12 noon, Wednesday 26 April.
Where: York Racecourse, Knavesmire Road, York, YO23 1EX.
How to participate: The board continues to believe that an in-person meeting is the most appropriate format, although it will keep this under review for future AGMs. Questions in advance of the AGM should be sent to firstname.lastname@example.org, with answers to be posted on the company’s website prior to the deadline for submitting proxy votes of 12 noon, Monday 24 April. More AGM details can be found here.
Who’s in the chair? Former William Hill chairman Roger Devlin was appointed in June 2018.
How did the company do in 2022? Revenues of £3.82 billion were 6% higher as new home completions rose by 317 to 14,868, with an average selling price up 5% to £248,616. Underlying profits grew 4% to £1.01 billion but an exceptional charge of £275 million for building safety remediation meant pre-tax profits fell to £730.7 million from £966.8 million. A final dividend of 60p per share is due to be paid on 5 May. For 2023, Persimmon intends to at least maintain the dividend with a view to growing this over time.
How have shares performed? Down 58% to 1,217p (1,204p on Wednesday).
How much is the boss paid? Dean Finch’s salary has not increased since January 2022 and remains at £746,750. His total remuneration for 2022 came to £2.14 million, which included an annual bonus of £1.1 million based on 72.78% of the maximum opportunity. Pre-tax profits and cash generation were used as benchmarks for 60% of the award, with the other measures being customer care, build quality and environment. Long-term performance shares awarded in 2020 vested at 58.72%, amounting to £194,900 of total remuneration.
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What’s in the new remuneration policy? Persimmon intends to retain the framework of the current policy, which was approved with over 97% votes in favour at the 2020 AGM. One change sees the annual bonus opportunity for the chief financial officer increase from 150% to 175% of salary, a move disclosed in last year’s annual report.
How did last year’s AGM go? The annual remuneration report was backed with 90.46% of votes in favour.
What’s the view of voting agencies? Glass Lewis recommends that shareholders support the annual remuneration report and the binding vote on the new remuneration policy. The previous year it raised concerns that chief financial officer Jason Windsor had been appointed on a salary some 26.8% higher than that of predecessor Mike Killoran.
How’s the company doing on diversity? The gender split of the board at the end of 2022 was 33% female. There was one director from a minority ethnic group.
When: 10am, Tuesday 25 April.
Where: etc.venues, 200 Aldersgate, London EC1A 4HD.
How to participate: Proxy voting instructions must be returned no later than 10am, Friday 21 April. More AGM details can be found here.
Who’s in the chair? Barry Gibson, the former Littlewoods boss and William Hill non-executive director, took on the role in February 2020.
How did the company do in 2022? The betting and gaming firm’s revenues of £4.3 billion were 12% higher than a year ago, driven by the strong performance of its BetMGM joint venture. Underlying earnings rose 13% to £993 million but a series of one-off items meant bottom-line profits fell to £102.9 million. A second interim dividend of £50 million worth 8.5p a share will be paid to shareholders on 27 April, bringing the total for the year to £100 million.
How have shares performed? Down 23% to 1,321.5p (1,254p on Wednesday).
How much is the boss paid? The salary of Jette Nygaard-Andersen increased in January by 3% to £844,600. Her total remuneration for 2022 amounted to £1.9 million after the annual bonus scheme paid £1 million based on 48.8% of the maximum opportunity. The 2020 long-term incentive plan vested at 80.7% of the maximum, but this did not apply to Nygaard-Andersen as she became an executive director in January 2021.
What’s in the new three-year remuneration policy? The maximum award of long-term incentives to the chief executive will increase to 450% of salary from 300%. This will be accompanied by more stretching performance goals, including a tougher benchmark for total shareholder return, while the shareholding requirement for the chief executive will rise from 400% to 450% of salary.
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The remuneration committee said the company needed to be able to hire and retain the best people globally, adding that employees are often targeted by firms outside Entain’s traditional competitor base, particularly US gaming operators looking to strengthen their teams with digital gaming experience. “We have first-hand experience with recent departures from our senior team, which are disruptive to the business and jeopardise Entain’s ability to deliver on its ambitious growth plans.”
How did last year’s AGM go? The annual remuneration report was approved with 98.5% of votes in favour.
What’s the view of voting agencies? Glass Lewis recommends shareholders support the annual remuneration report and the binding vote on the new remuneration policy. On the latter, it said: “We believe the proposed remuneration policy remains reasonable relative to peers and that the committee has sufficiently rationalised such increases.”
How’s the company doing on diversity? The proportion of women on the board at the end of 2022 remained at 36%. Entain also meets the Parker Review target of at least one director from an ethnic minority background.
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