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Marks & Spencer, Sainsbury’s and Informa are among the companies in focus
Thursday 14 Jul 2022 Author: Tom Sieber

Shareholders are baring their teeth as the annual general meeting season progresses, as Shares predicted would be the case back in April. 

Unsurprisingly, given many investors will have taken a fair amount of pain so far in 2022, much of the action has centred around pay for top executives.

Among the more recent high-profile rebellions was Marks & Spencer (MKS), where investors accounting for nearly 30% of the company voted against a remuneration package which encompassed a £1.6 million bonus for outgoing chief executive Steve Rowe.

Shortly after seeing a 38% revolt against directors’ pay, Alison Brittain stepped down from the top job at Premier Inn owner Whitbread (WTB).

Information services and events firm Informa (INF) endured an even more bruising revolt on 16 June as more than 70% of shareholders voted against the £2.7 million pay package for chief executive Stephen Carter. The disquiet follows the suspension of dividends during the pandemic and a £1 billion discounted fundraise.

Sandra Novakov, head of investor relations at Citigate Dewe Rogerson, told a recent London Stock Exchange webinar: ‘Some of the questions our clients faced were centred on the rigour of targets that pay was linked to, especially given that during the last two years during Covid times some of the targets were lowered given difficult market conditions. So, ensuring full transparency around how payouts were determined was critical to avoiding any surprises.’

Novakov added that as the cost-of-living crisis continues to bite, companies could face questions at next year’s AGM season, particularly if the pay of their CEOs is ‘wildly out of sync’ with that of ordinary employees.

It’s not just executive pay which has been in focus as ESG (environmental, social and governance) considerations have also been under the spotlight.

Lots of companies have been putting climate plans to a vote and, notably, Sainsbury’s (SBRY) shareholders voted down a resolution which would have committed the company to extend the ‘real living wage’ to all its workers, not just those directly employed by the supermarket.

Sainsbury’s had recommended voting against the change which had been submitted by a coalition made up of Legal & General Investment Management, Nest, Coutts and non-governmental organisation ShareAction.

Meanwhile, other firms are facing external pressure from activists to change strategy. At online estate agent Purplebricks (PURP:AIM), activist investor Lecram Holdings is pushing for chairman Paul Pindar to go.

Shares in Purplebricks have fallen from a high of 514p in 2017 to less than 15p as plans for international expansion went up in smoke and the company faced claims linked to its treatment of tenants in its lettings arm.

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