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Revolting shareholders: Scottish remuneration policy rebellion

Shareholders in STV Group (LON: STVG) have not been totally supportive of the media company’s remuneration policy. A shareholder vote on the policy happens every three years. One-quarter of the votes cast were against the directors’ remuneration policy, which is up from one-fifth three years earlier.

However, the vote against the directors’ remuneration report was 1.92%, down from 16.1% against the resolution at the previous AGM.

Management says that it consulted with the largest shareholders ahead of the latest AGM and the policy was revised. STV currently pays 20% of the chief executive’s salary into a pension, but it intends to reduce this to 7% by the end of 2022, which is in line with the other employees. It has also introduced post-employment shareholding guidelines where executive directors are required to retain their shares for two years after employment. Provisions for clawing back payments due to corporate failure have been put in place for incentive payments from 2021.  

The remuneration committee decided that there should be no increase in executive director salaries. The maximum annual bonus has been increased from 125% to 150% of salary, though.  

The performance measures for the 2021 LTIP remain the same, but the earnings measure (50% weighting) target range was widened to between 4% to 13% annualised growth. The relative total shareholder return (20% weighting) is required to be the median for the FTSE SmallCap index constituents for the receipt of the minimum of that part of the award.

The other 30% of the award is based on operating profit for non-broadcast activities. This range has increased to between £9.5m and £16.5m. Non-broadcast activities generated one-third of 2020 profit and the target is to take that to 50%.

London Stock Exchange

London Stock Exchange Group (LON: LSEG) is not immune to dissenting shareholders. There were 23.5% of votes cast against the remuneration report. There had been little objection at previous AGMs. The largest vote against was 5.9% in 2018 and last year it was 2.2%.

Chief executive David Schwimmer’s salary has been reviewed following the acquisition of Refinitiv. Shareholders were consulted and the report says they were “broadly supportive of the underlying principle”. The chief executive’s salary was increased by one-quarter to £1m. The argument was that this is still in the lower quartile of the FT 30, whereas the company is one of the bigger companies in the index.

The minimum shareholding that the chief executive has to hold has been increased to from 300% to 400% of base salary. The maximum annual bonus can be 225% of salary.

British American Tobacco

At the British American Tobacco (LON: BAT) AGM, 38.29% of votes were cast against the 2020 remuneration report. Last year, 38.06% of the votes cast were against the resolution, so there has been little change. BAT says that it has engaged with shareholders in the past year, and it changed some of its remuneration proposals, but that had little effect on the vote.

There was also a 27.67% vote against the authority to allot shares, compared with 27.62% the previous year. Some institutional investors have a policy to vote against this resolution.


AIM-quoted Fintel (LON: FNTL), which was formerly known as SimplyBiz, shareholders continue to vote in significant numbers against the annual report and accounts and two non-executive directors, although the percentages have fallen. The vote against the provider of support services to the financial services sector’s annual report fell from 31% to 25.2%.

The vote against Ken Davy fell from 23% to 17.2% and the vote against Tim Clarke declined from 34% to 24.8%. In 2019, there were no votes against Tim Clarke.

Ken Davy is a founder of the company and was chairman until the AGM. He and Tim Clarke, who was appointed in 2016, are the longest serving non-executive directors.

Ken Davy also owns 8% of Portus Felix, which is leasing Fintel House to the company – a transaction from February 2020. The two resolutions concerning this transaction had 26.9% of votes cast against them.


Professional services provider RPS (LON: RPS) was hit by a revolt due to Gary Young’s notice period as director starting two months after his retirement was announced. There were 31% of votes against the remuneration report, compared with 3.7% against the previous year.

There were 16.75% of votes cast against the re-appointment of non-executive chairman Ken Lever, although that was down on the 18.86% at the previous AGM. He has been in the role for more than four years and has non-executive positions at four other quoted companies.

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