Shareholder power has brought more companies to heel over corporate governance, the National Association of Pension Funds has said.
In its third annual review of the ‘season’ of annual general meetings, the NAPF says 2015 “has seen much more purposeful and effective engagement between companies and investors – but there remained a number of exceptions”.
These included 12 companies in the FTSE 350 where shareholders had for a second successive year expressed discontent on the same issue, and 17 where more than 15 per cent voted against the re-election of individual directors.
The review also highlights ‘the top five FTSE 100 and top ten FTSE 250 shareholder rebellions on executive pay’.
Will Pomroy, the NAPF’s policy lead on corporate governance and stewardship, commented: “Limited regulatory changes and a general election resulted in fewer corporate governance headlines. That said, the increased focus on corporate governance is here to stay.” There were three shareholders’ resolutions at large UK companies - an uncommon occurrence in the UK - and significant rebellions at around one in five of FTSE 100 and FTSE 250 companies.
Mr Pomroy said in the current economic environment it was encouraging to see a third of chief executive salaries frozen, bonus opportunities and awards remaining static, and long-term incentive opportunities and awards increasing only slightly.
But too many remuneration structures were “unnecessarily complex and in many cases there remains insufficient transparency around bonus targets”.
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