Executive pay factors in only four of top 10 shareholder protests

Fewer than half of the most serious investor revolts at the UK's largest listed groups this year have been about executive pay, despite the noise surrounding protests over remuneration.

Analysis by Manifest, the proxy advisory service, and the Financial Times shows that only four out of the 10 biggest expressions of shareholder protest at FTSE 100 companies have been in response to pay reports.

While executive pay remains the single biggest issue, opposition to other issues has focused on powers allowing companies to raise funds without asking shareholders; the notice period for calling meetings and non-executive directors' attendance.

Two companies - mining group Anglo American and technology group Arm Holdings - have attracted significant shareholder dissent on more than one vote, accounting for half of the most extensive protests between them.

Paul Hewitt, European business development manager at Manifest, said that the attention to pay over the past couple of years as the new "say on pay" regime had been introduced made companies feel more scrutinised. "In my experience, the pattern of the last year or two is that there are fewer battles, but where we see them they are more conspicuous," he said.

Centrica attracted the biggest pay revolt in the Manifest analysis, with dissent of 34 per cent, followed by Arm with dissent of 33 per cent.

Arm said it believed its pay levels were appropriate given its need to attract and retain talent in a "highly competitive worldwide market".

One in five of the shareholder base at Arm also failed to support the group's resolution to give just 14 days' notice of a general meeting. At Anglo American, 18 per cent of shareholders failed to support a similar resolution.

Mr Hewitt said overseas shareholders often opposed shorter notice periods because they found it difficult to get their votes processed in under 21 days.

But the largest revolt at a company's most recent annual meeting - at Ashtead - did not feature in the Manifest analysis because it happened late last year. Almost 35 per cent of the tool hire company's shareholder base refused to approve the remuneration report which included a 20 per cent rise in base salary for chief executive Geoff Drabble.

The most serious revolts on capital raising powers were at Anglo American, British American Tobacco and Arm.

The highest profile revolt against an individual director came at Reed Elsevier, where almost three in 10 of the shareholder base failed to support the re-election of Robert Polet. The publishing group said he had been unable to attend two of the six board meetings during the year, one for personal reasons, and that its corporate governance committee believed every director "continues to function effectively and demonstrates commitment".

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation