News
Julia Irvine 5 Dec 2018 04:52pm

FTSE companies named and shamed by investors

FTSE 100 companies Astra Zeneca, Berkeley Group and WPP are among 32 companies in the FTSE All-Share to be branded “repeat offenders” after appearing on the public register of investor revolts two years running for the same reason

They have been named and shamed in a new list which has been added to the public register.

The register was set up by the Investment Association (IA) at the government’s behest; it tracks significant shareholder dissent (20% and above) at agms and general meetings and aims to persuade companies to listen and respond to their shareholders’ evident dissatisfaction.

The association has written to all 32 companies expressing concern about their appearance on the register for exactly the same resolution in 2017 and 2018.

It suggests they are not taking sufficient account of their shareholders’ views and warns them that if they don’t respond, they are in danger of facing more shareholder rebellions in the future.

The repeat offenders list shows that the issue that most commonly riles shareholders is the remuneration report (15 cases), closely followed by director re-election (14).

Other resolutions included authority to allot shares (6), rule 9 waiver (3), disapplication of pre-emption rights (1), independent shareholder vote on independent directors (1) and auditor re-election, remuneration (1) and auditor re-election, remuneration (1).

This last case, as Impax Environmental Markets explained in May following its agm, relates to the re-appointment of EY as auditors. Although the resolution was passed by a majority (78,446,110), there was a significant number of votes (24,304,025) against.

“An audit tender was conducted during the year ended 31 December 2013 and Ernst & Young LLP were reappointed in that tender,” it said. “Ernst and Young LLP’s continuing appointment is compliant with current rules.”

The company added that it believed the resolution was in the best interests of shareholders as a whole.

Berkeley Group, which faced a rebellion over the re-appointment of non-executive director Adrian Lee, said it had explained to investors that, because of different rules in Asia and the UK, Lee technically held too many directorships.

However, it added that he had proved himself over a number of years to be an “excellent” and “committed” member of the board.

Nevertheless, the IA’s director of stewardship and corporate governance, Andrew Ninian, is frustrated by the intransigence of the 32. “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 said.

“While many companies are taking the necessary action and engaging with their shareholders, a frustrating number are failing to address investor concerns.

“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.”

The point of naming and shaming the companies, he added, was to encourage them to engage with their shareholders and address their concerns.

 

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