Thomas Cook: joined up voting on pay

Thomas Cook pay

Travel company, Thomas Cook received a warning on pay this week at its AGM when the voting results showed that some investors at starting to take a joined up approach to remuneration-related voting. This is a signal to all companies seeking approval for their remuneration policies and new incentive plans this year that shareholders do not want the potential for excessive awards under these schemes.… Read the rest

Top UK companies and investors update say on pay guidance

The UK’s GC100 and Investor Group – made up of top general counsel, company secretaries and corporate governance heads at fund manager groups – has published its latest remuneration reporting guidance replacing the original version which was produced following the updating of pay disclosure regulations in 2013 which included the introduction of binding remuneration policies approved at least every three years by shareholders.… Read the rest

UK executive pay reforms drove reputation management study finds

The initial response of the top UK companies to new reporting requirements was not to curb executive pay or improve the link CEO pay and firm performance at FTSE 100 companies, but led instead to “opportunistic reporting for the sake of reputation management,” says a study from Cambridge Judge Business School and King’s College London.… Read the rest

WPP’s remuneration vote passes – with higher dissent

Despite public calls for pension funds to vote against WPP’s remuneration report at its AGM this week (8th June) the resolution was passed with 33.5% dissent – higher than 2015’s 22.2% protest vote.

ShareAction had condemned the chief executive’s (CEO) Sir Martin Sorrell’s £70m pay packet, which makes him the highest paid CEO in the FTSE 100.… Read the rest

Single Figure Calculations prove tricky for Legal & General

The insurer and institutional investor Legal & General plc (L&G), had to correct its annual report pay figures for chief executive, Nigel Wilson, on the eve of its AGM last week (26th May).

L&G, whose investment division LGIM is active in corporate governance issues, admitted that awards from Wilson’s 2012 performance share plan had not been included because originally they had looked at the 2016 exercise date rather than when they vested in 2015.… Read the rest

Shell has muted opposition to executive pay but Standard Life continues to raise auditor concerns

Royal Dutch Shell experienced a relatively modest level of investor opposition to its executive remuneration report at its recent AGM with a 14% vote against, this follows the rival oil company BP’s loss of its pay vote last month. However, Manifest data shows it is the highest level of opposition Shell has received in the past six years – although it hovered between 10% and 11% between 2012 and 2014.… Read the rest

Anglo American faces opposition to executive pay

Mining group Anglo American faced a 42% vote opposing its remuneration report at its AGM this week. Though not a complete rejection the company acknowledged that it needed to engage with shareholders further in advance of the remuneration policy vote next year which will be binding.… Read the rest

BP, Smith & Newphew AGM season blow out

The 2016 AGM season started with major defeats for two FTSE100 companies. Last Thursday (14th April) oil giant BP and medical equipments supplier, Smith & Nephew saw their remuneration reports rejected by shareholders at their AGMs. At the BP AGM there was a 59% vote against the remuneration report and at Smith & Nephew 53% of shareholder votes cast were opposed to the remuneration report.… Read the rest

Chemring Group could still face dissent over executive pay

Chemring Group, a specialist designer and manufacturer for the aerospace, defence and security industries, that was forced to engage with shareholders last year following a high level of dissent at its AGM over its remuneration practices may still not have done enough to meet investor concerns.

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Stelios Haji-Ioannou opposes easyHotel’s directors’ remuneration report

The founder of the Easy group of companies, Sir Stelios Haji-Ioannou, used his 49% stake in easyHotel, to vote against the company’s directors’ remuneration report leading to a majority opposing the resolution to approve the report at its recent AGM. Votes on the other resolutions were withheld.… Read the rest

Switzerland and the Minder Initiative: What would Spiderman say?

The Swiss Federal Council recently published their “Proposal for an Ordinance against abusive remuneration practices” in response to the successful popular referendum on what has been dubbed the “Minder Initiative”.  It is the first formal consultation stage ahead of the tabling of a formal legislative proposal, timetabled for November, in time for a January 1st 2014 implementation date.… Read the rest

BIS consults on enhanced shareholder powers on executive pay

Vince Cable, Secretary of State for Business, Innovation and Skills, this week announced the latest government consultation on executive pay, this time aimed specifically at enhancing shareholder voting rights on the matter.

The consultation seeks opinions on the following outline policy proposals:

  • An annual binding vote on future remuneration policy
  • Making the vote on future remuneration policy subject to a super-majority threshold
  • An annual advisory vote on implementation of policy in the previous year
  • A binding vote on exit payments of more than one year’s base salary

Looking at the proposals themselves, it is clear they will have an impact on service contracts, possibly requiring the re-negotiation of some in order to ensure they eradicate ‘guarunteed’  bonuses or loss of office amounts which would come under the purview of direct shareholder approval.… Read the rest