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Shareholder revolts surge at UK companies over pay


Shareholder revolts over pay at FTSE 250 companies rose sharply last year as investors tried to rein in excessive executive remuneration.

The Investment Association, the trade body whose 250 members manage £7.7tn in assets, said executive pay was top of investors’ concerns and set to dominate discussions between shareholders and companies in 2020.

According to an analysis of its public register, which tracks UK companies where at least 20 per cent of investors revolted at an annual meeting, a total of 62 companies appeared on the register in 2019 for pay-related resolutions.

This included 31 FTSE 250 companies — an increase of almost 30 per cent.

Andrew Ninian, director for stewardship and corporate governance at the IA, said: “Investment managers are keeping up the pressure on companies to align executive pay with their long-term strategy.”

Companies that appeared on the register over pay in 2019 include Standard Life Aberdeen, the UK’s largest-listed asset manager; Barclays, the bank; and Ocado, the online supermarket.

Several companies have repeatedly appeared on the register over pay issues, suggesting they are failing to address investors’ concerns over their executive remuneration packages.

Centamin, the gold miner; Playtech, the betting software provider; and Safestore Holdings, the storage company, were among those to have been on the register for three years in a row.

Last year, almost 34 per cent voted against Centamin’s pay report, while 41.8 per cent voted against Playtech’s, and almost a third did not support Safestore’s remuneration report.

Centamin said its new pay policy, which was approved by shareholders last year, addressed investors’ concerns about remuneration. It added that the vote against its pay report last year was linked to an older pay policy.

Playtech’s new pay policy was approved last year, although the company also faced big opposition. Safestore is set to update its policy this year.

A quarter of listed companies in the UK ended up on the IA public register in 2019. Some 39 companies appeared on the register for the exact same resolution for at least two years in a row, including Mitchell & Butlers, the pub company behind brands including Toby Carvery and Harvester.

The IA’s report comes as shareholders gear up for a tetchy annual meeting season. The majority of public companies in the UK will be putting their remuneration policy to shareholders as part of a triennial process in 2020, with many shareholders predicting big clashes.

Mr Ninian said: “Investment managers will be paying close attention this year when companies bring their pay policies to the table to see whether they’ve heeded the high levels of dissent.”

Angeli Benham, investment stewardship manager at Legal and General Investment Management, the UK’s largest asset manager, predicted there could be a big jump in companies that appear on the register in 2020 over pay, because so many new remuneration policies are being proposed.

“The companies that are trying to push up [total pay], they are going to get a high vote against,” she added.



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