29th January 2019


Dissent levels at a five-year high
Executive pay and directors’ election top areas of dissent
Voting guidelines published alongside analysis highlight issues of audit, climate change and executive pay for 2019 AGM season

A Pensions and Lifetime Savings Association (PLSA) report published today (Tuesday) has found that across the FTSE 350, 148 AGM resolutions attracted ‘significant’ (over 20%) dissent levels across 82 different companies in 2018.

The number of resolutions attracting significant dissent represent an approximate 25%* increase from 2017, where 117 AGM resolutions attracted significant dissent at 73 different companies.

The PLSA examined AGM results for companies in the FTSE 350 Index in 2018, highlighting resolutions that attracted significant levels of dissent. In both the FTSE 250 and FTSE 100, roughly one quarter of companies experienced significant dissent on at least one resolution at their AGM. Dissent levels of over 20% were classified as ‘significant’ in line with guidance from the GC100 and Investor Group.

The report looks at historical levels of dissent since 2008 and shows that in 2018 the level of significant dissent has risen to a five-year high. This follows a period of steady discontent in the wake of the 2008 financial crisis.

Remuneration-related voting dissent remained a key area of concern in 2018. While the figures for the FTSE 250 remain broadly consistent with those from 2015-2017, the number of resolutions attracting significant dissent on FTSE 100 remuneration-related votes in 2018 versus 2017 has nearly tripled**.

The 2018 AGM season also saw shareholders become more vocal regarding concerns about ‘over-boarding’ of directors, where directors hold multiple appointments. This investor frustration seems to be borne out in the PLSA report figures.

The analysis has been published in PLSA’s AGM Voting Review alongside the updated PLSA Corporate Governance Policy and Voting Guidelines for the 2019 AGM season. The guidelines set out voting best practice for pension funds or their asset managers to use and support positive progress on the issues highlighted in the report.

The PLSA guidelines provide practical advice on how to approach common issues such as the conditions under which pension funds should support or oppose the typical resolutions at AGMs, including the approval of the report on executive remuneration, the re-election of directors or the appointment of the auditors. This year’s update draws on a new UK Corporate Governance Code from the Financial Reporting Council.

Caroline Escott, Policy Lead, Investment and Stewardship at the PLSA, said:

“Pension schemes hold key stakes in FTSE 350 companies and it’s right that they use their influence as owners to encourage companies to behave responsibly. Issues like executive pay and over-boarding are important for investors and, although there is no room for complacency, it’s good to see this increasingly reflected in the findings.

“This year’s Corporate Governance Policy and Voting Guidelines for UK pension schemes will help ensure the sector is well informed on key issues, such as how well companies are acting to mitigate climate risk or their approach to workforce wellbeing and engagement, before we enter the 2019 AGM season. The Guidelines should help investors in making positive contributions to change and influence corporate behaviour.”

The PLSA AGM Voting review can be found here.

PLSA Corporate Governance Policy and Voting Guidelines 2019 can be read in full here.

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