Trade body says hardcore of ‘repeat offenders’ are failing to listen to investor views
The trade body for UK investment managers has written to 32 companies on the Ftse-all share to register concern after they faced significant shareholder dissent for the last two years.
The Investment Association (IA) said it was concerned that these companies had appeared on the public register, which tracks significant shareholder dissent, for the same reasons over the last two years.
The IA said this suggests the companies named do not respond sufficiently to investor views and are risking more shareholder dissent in the future.
Three of the companies are from the Ftse 100: advertising firm WPP, property developer Berkeley Group and pharmaceutical giant Astrazeneca.
The public register tracks significant shareholder dissent (of more than 20 per cent) at company meetings and asks firms to respond to that dissent.
The IA today launched a new repeat offenders list, highlighting those companies who experience year-on-year revolts for the same resolution.
The register has revealed that an increasing number of companies are facing shareholder opposition, with rebellions up by nearly a quarter in 2018. So far in 2018, 287 individual resolutions have been added to the public register, a jump of 22 per cent form 2017.
Andrew Ninian, director of stewardship and corporate governance at the Investment Association, said: “Appearing on the public register should act as a warning to companies that their shareholders are concerned about an aspect of the company’s governance.
He added: “We hope that the increased focus on these repeat offenders will encourage them to engage with their shareholders and ensure their concerns are being addressed. The risk if they do not is greater investor concern in the future.”
A spokesperson for WPP which suffered a large vote against its compensation report at its 2018 AGM said: "The reason for the significant vote against the report was primarily discontent around the non-disclosure of the details and outcome of an investigation into an allegation of personal misconduct by Sir Martin Sorrell, the terms of his 2008 employment agreement, his subsequent resignation in April 2018, his contractual treatment as a retiree and the ‘good leaver’ treatment of his outstanding share awards.
“The chairman and the company have engaged extensively with shareowners on the obligations of the Company and the historic and unique nature of the 2008 employment agreement, which have not been replicated in the employment terms of the new CEO of the company.”