Find out what the experts think about behaviour at two well-known blue-chip companies. After a backlash last year, there's also a high-flying mid-cap firm that could face another revolt over pay.
The pay of Future (LSE:FUTR) boss Zillah Byng-Thorne will be under scrutiny at the publisher's AGM next week after it emerged her total remuneration hit £8.8 million last year.
The FTSE 250 company's shares have soared, but that's unlikely to spare it from another rebellion as proxy voting agency Glass Lewis said the response to last year's protest vote in relation to a new bonus scheme had been inadequate.
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Other AGMs next week will see the boards of accounting software firm Sage (LSE:SGE) and catering giant Compass Group (LSE:CPG) ask shareholders to back new remuneration policies. One area of focus for the SSP Group (LSE:SSPG) meeting will be the hike in CEO's salary awarded to new recruit Patrick Coveney.
When: 11.30am, Thursday 3 February.
Where: Future's London office at 121-141 Westbourne Terrace, Paddington, W2 6JR.
How to participate: Last year's AGM was webcast live to shareholders, but no facility is available this year. Questions should be sent to CoSec@futurenet.com, with proxy voting forms needed by 11.30am on Tuesday, 1 February. Shareholders can find the AGM notice on page 174 of the annual report.
Who's in the chair? Former Chrysalis boss Richard Huntingford has been chairman since February 2018.
How did the company do in the year to 30 September? The publisher's 23% organic growth and acquisitions including GoCompare and Marie Claire US helped revenues to rise 79% to £606.8 million. Earnings per share grew 28% to 59.3p. A final dividend of 2.8p is due to be paid on 9 February, an increase of 75% on a year earlier to reflect confidence in the outlook.
How did shares perform in the year? Up 90% to 3,690p (3,132p on Thursday).
How much is the boss paid? Zillah Byng-Thorne is on a basic salary of £575,000, which has not been changed for this year after a 21% increase last time. Her total remuneration for 2020/21 came to £8.84 million. This included £7 million from the vesting of long-term incentives after the earnings per share growth and share price significantly exceeded targets set three years earlier. Strong trading in 2020/21 meant she also received the maximum annual bonus payment of £1.15 million, half of which will be deferred in Future shares for two years.
What happened at last year's AGM? Votes of 36%, 27.5% and 36% respectively went against the three-year remuneration policy, the annual remuneration report and the introduction of the company's Value Creation Plan, which has replaced the Performance Share Plan.
Why were so many shareholders unhappy? Their focus was on the new Value Creation Plan, which is open to all employees and capped at a total pot of £95 million each year. Byng-Thorne's total opportunity over the three years of the scheme is just over £40 million, dependent on meeting share price targets. The remuneration report protest vote followed her 21% pay rise.
How has the company responded? Meetings have been held with shareholders, but Future continues to believe in the Value Creation Plan: “The introduction and roll-out of the VCP and the continued exceptional growth of the group have demonstrated the power of incentivising and rewarding all employees on the performance to which they contribute.” It adds that Byng-Thorne's pay rise last year was her first in a three-year period of strong revenues growth.
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What's the view of voting agencies? Glass Lewis described the company's response to last year's dissent as inadequate and is recommending shareholders vote against the remuneration report. It continues to warn of the potential for the VCP to hand “extremely large pay-outs” based solely on shareholder value creation, which primarily reflects market forces rather than company or management performance. It is disappointed the pay committee hasn't made changes to the VCP or more broadly in direct response to concerns about the level of Byng-Thorne's remuneration. Glass Lewis also recommends voting against the re-election of remuneration committee members Hugo Drayton, chairman Mark Brooker and Rob Hattrell.
How is the company doing on diversity targets? Future exceeds the Hampton-Alexander gender target, with 44% of the board being female. It is working towards Parker review objectives to have at least one director of colour by 2024.
When: 12 noon, Thursday, 3 February.
Where: Live Room at Rugby Football Union Stadium, Rugby House, Twickenham Stadium, 200 Whitton Road, Twickenham, Middlesex, TW2 7BA.
How to participate: For shareholders not able to attend in person, they can view a live webcast through which they can submit questions. The deadline for the receipt of proxy voting forms is 12 noon on Tuesday, 1 February. More details on the AGM can be found here.
Who's in the chair? Former Wolseley chief executive Ian Meakins succeeded Paul Walsh at the end of December.
How did the company do in the year to 30 September? The contract caterer's underlying revenues recovered to 88% of 2019 levels by the fourth quarter, with the underlying margin improved to 5.8%. Full-year earnings per share lifted 72.5% to 29.5p and led to the reinstatement of the dividend with the payment of 14p a share due on 28 February.
How did the company's shares perform? Up 30% to 1,524p (1,670p on Thursday).
How much is the boss paid? Dominic Blakemore's £1 million base salary has been increased by 4.5% for the 2021/22 year. He received a near maximum £2 million bonus, but long-term incentives failed to vest in the last financial year to leave his total pay for 2020/21at £3.2 million. North America boss Gary Green, who is paid in dollars, got £3.1 million in total.
What's in the company's new remuneration policy? The three-year policy was approved at last year's meeting with 95.7% support. But the company is making further changes to ensure it is able to “engage, motivate and retain” key staff. This includes increasing the multiple of salary on future long-term incentive awards from 300% to 400% for the CEO. Directors are now required to defer one third of any bonus into shares for three years and the level of share ownership will increase to 400% of salary for the CEO.
What's the view of voting agencies? Glass Lewis says the proposed increase in long-term incentive awards and overall remuneration opportunity is reasonable relative to peers. It believes that shareholders should support the binding vote on the new remuneration policy, as well as the advisory vote on the remuneration report.
How did last year's AGM go? The remuneration report was supported with 97.5% of votes.
How is the company doing on diversity targets? Female representation on the board was 36% at the end of September, against 57% across the total workforce. The company meets the Parker Review recommendation for one director from an ethnic minority background.
When: 12 noon, Thursday 3 February.
Where: Sage offices, C23 - 5 & 6, Cobalt Park Way, Cobalt Park, Newcastle Upon Tyne, NE28 9EJ.
How to participate: Shareholders at the physical venue or attending electronically will be able to vote in real time during the meeting. Those who are unable to attend or who would prefer to vote in advance should submit their proxy voting forms by 12 noon, Tuesday 1 February. More details on the AGM can be found here.
Who's in the chair? Andrew Duff is hosting his first Sage AGM, having previously served as Severn Trent chair from 2010 until 2020.
How did the company do in the year to 30 September? Recurring revenues growth of 5% was ahead of initial expectations as the accounting and payroll software group saw strong demand for cloud solutions. It also benefited from restructuring efforts over the past three years as it delivered a margin in line with expectations at 19%. Basic earnings per share fell 7% to 26.33p but the final dividend has been lifted 2.7% to 11.63p for payment on 10 February.
How did the company's shares perform? Down 1.5% at 709.6p (701p on Thursday).
How much is the boss paid? Steve Hare's base salary increased 3% in January to £809,000, having seen no increase last year. A bonus award worth £827,000 after achieving 60% of the maximum opportunity and the vesting of long-term incentives of £681,000 took his total for 2020/21 to £2.45 million. He received £1.5 million the previous year.
How is the remuneration policy changing? The CEO's shareholding requirement will increase to 300% of salary from 250%, with a new post-exit requirement lasting two years. The CEO's long-term incentive award is being increased this year from 200% of base salary to 250%, which remains within the existing policy limit of 300% base salary.
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What's the view of voting agencies? Glass Lewis believes the policy changes are positive, adding that the overall incentive opportunity is reasonable relative to peers. However, it remains concerned about performance conditions being too narrow, with the focus on annualised recurring revenue allowing for a high level of pay-out for hitting a single target. The agency recommends that shareholders support the binding vote on the remuneration policy and the advisory vote on the annual remuneration report.
How did last year's AGM go? The remuneration report was supported with just under 90% of votes being in favour.
How is the company doing on diversity targets? The gender balance of the board at the end of the financial year was below the 33% recommended by the Hampton-Alexander review. After Sir Donald Brydon’s retirement, it has improved to 30% female representation. Sage meets the target of the Parker review for at least one board member from an ethnic minority background.
When: 11am, Friday 4 February.
Where: Travers Smith, 10 Snow Hill, London EC1A 2AL.
How to participate: Proxy voting forms need to be returned by 11am, Wednesday 2 February. More details on the AGM can be found here.
Who's in the chair? Mike Clasper, the former chief executive of BAA, has been chairman since February 2020.
How did the company do in the year to 30 September? The Upper Crust and Camden Food business posted revenues of £834.2 million, down 41.8% on 2020 and 70.1% below the pre-pandemic level in 2019. The loss came to £411.2 million or 51.3p a share but the financial position was strengthened by an April rights issue and extension of banking facilities.
How did the company's shares perform? Up 85% to 276.8p (275p on Thursday).
How much is the boss paid? Simon Smith stepped down as chief executive on Christmas Eve in order to take up a role at private equity-backed vets business IVC Evidensia. He was not awarded an annual bonus and did not receive a payment in lieu of notice, resulting in total remuneration for the year of £797,000. Patrick Coveney starts on 31 March on a salary of £775,000, about 19% higher than his predecessor. His annual bonus opportunity is 175% of salary with a Restricted Share Plan award of 100%. He has been granted replacement share awards for those he forfeited at his previous employer, Greencore.
What's the view of voting agencies? Glass Lewis is not concerned by the jump in Coveney's starting salary because he has a proven track record at another FTSE 250 company operating in the same sector. It recommends shareholders vote in favour of the annual remuneration report.
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How did last year's AGM go? The three-year remuneration policy and the new Restricted Share Plan were approved with respective votes of 90.2% and 89.75% in favour. The annual remuneration report got 99.7% support.
How is the company doing on diversity targets? Following Coveney's appointment, the board will be 50% male and 50% female. It also meets the Parker review target to have at least one board member of colour.
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