It seems some companies are unwilling to learn the lessons of last year’s shareholder revolts. That, at least, is the view of the Investment Association (IA), a trade body for investment managers, which has unveiled figures showing that the number of revolts has lept by almost a quarter in 2018.
The association, whose members have around £7.7trn under management, has this week written to 32 companies identified as repeat offenders—those judged to have suffered a second shareholder revolt in two years for the same issue.
Companies suffering a shareholder vote of 20% or more against a resolution at their AGM go on the Public Register, a database maintained by the IA on its website. The IA says that of 287 individual resolutions so far this year the number added to the Public Register has jumped by 22%, a figure that clearly disappoints the IA’s management. They say a number of companies have failed to heed the warning of going on the register first time around.
According to Andrew Ninian, director of stewardship at the IA, appearing on the register the first time around should be viewed as a warning to give shareholder worries their due attention.
“While many companies are taking the necessary action and engaging with their shareholders, a frustrating number are failing to address investor concerns,” says Ninian.
“We expect these companies to provide an update statement to their shareholders on the engagement they had since the AGM vote, the views heard from shareholders and the follow-on actions taken.
“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.”
Among the FTSE 100 companies to receive a letter are AstraZeneca, WPP and Berkeley Group. Both AstraZeneca and WPP went on the register after votes against their remunerations reports. The pharma giant saw 34.92% of shareholders object, while 27.75% opposed WPP.
Berkeley Group saw revolts against the reappointment of Adrian Li as a non-executive because of concerns about overboarding.
The biggest revolt this year among the 32 recidivists was the 59.38% vote in opposition to the remuneration policy of Playtech PLC, the supplier of online gaming software. Shareholders registered their objections to a pay rise for chief executive Mor Weizer, whose remuneration was set to jump from £2.3m to £4.2m until proxy advisers Glass Lewis and ISS advised shareholders to demonstrate their disapproval.
In a previous statement the IA said there had been a rise in the number of revolts over executive pay during 2018, but also a significant increase in votes against director re-election.
The full list of the 32 companies receiving a warning letter from the Investment Association are as follows:
Berkeley Group Holdings plc
Capital and Counties Properties plc
Entertainment One Ltd
Games Workshop Group plc
GVC Holdings plc
Intu Properties plc
Mitchells & Butlers plc
Safestore Holdings plc
Sophos Group plc
Telecom Plus plc
FTSE Small Cap
AO world plc
Impax Environmental Markets plc
Keystone Investment Trust plc
Mears Group plc
Premier Oil plc
Raven Property Group Ltd
Stock Spirits Group plc
Tarsus Group plc