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As the 2022 AGM season picks up pace, a number of meetings have seen considerable shareholder dissent, with two failed resolutions at Shaftesbury plc and one at Future plc. In addition, Compass Group plc and SSP Group plc saw significant no votes (at least 20% opposition) against the remuneration policy (33%) and remuneration report (22%) respectively, while Easyjet noted dissent against its remuneration policy, the directors’ authority to allot shares, and a proposed restricted share plan.

Data compiled by Market Tracker indicates that the disapplication of pre-emption rights in connection with the issue of shares for the purpose of an acquisition or specified capital investment was a point of contention in the 2021 AGM season. The resolution failed to pass at five companies, with three of those companies also voting down the general disapplication of pre-emption rights. There are signs that this trend is set to continue. Shaftesbury, a company that exclusively invests in London’s West End real estate, saw both of its resolutions seeking to waive pre-emption rights fail to gain the necessary support. The special resolutions, which require a majority of 75% to pass, received 29% and 28% opposition respectively, exactly the same level of opposition that the resolutions received at the company’s  last year.

In response, the company included the following statement alongside its :

‘Both of the resolutions followed the provisions of the Pre-Emption Group's Statement of Principles for the disapplication of pre-emption rights and reflect UK listed company market practice. The Board considers the flexibility afforded by these authorities to be in the best interests of the Company.’

The statement echoes Shaftesbury’s comments the previous year, in which it acknowledged the significant votes and stated that the proposals to waive pre-emption rights reflected market practice for UK listed companies. The company also confirmed in its  that it had addressed these concerns directly, noting the preference of a particular investor for shares to be issued in accordance with existing shareholdings:

‘Subsequent to the AGM, we have engaged with the shareholder in relation to the relevant resolutions and understand that the shareholder felt that, following the capital raise undertaken by the Company in 2020, the authorities were unlikely to be imminently required, and also that certain of its own shareholders do not generally support authorities for directors to issue shares other than on a pre-emptive basis.’

Remuneration has been high on the shareholder agenda for the past few years and, unsurprisingly, appears to be attracting shareholder scrutiny again. For AGMs held during 2022, we have seen five companies receive significant no votes against their remuneration report so far. However, Future is the first company to see its report fail to pass, receiving opposition of 55.44%.

This is not the first time the UK digital-media group has seen significant shareholder dissent. While all resolutions passed at its 2021 AGM, the company released a  in recognition of significant votes opposing the remuneration policy, remuneration report, and its controversial Value Creation Plan, noting ‘feedback provided by shareholders on the salary increase awarded to the CEO’. This year, the company attributed the failure of its 2022 remuneration report to the leaving provisions of former CFO Rachel Addison, whose unexpected departure after less than 18 months in the role is likely to be the reason for a drop of 3.9% in Future’s share price. The company went on to :

‘The Board believes that the leaving provisions were in the best interests of shareholders and that the value of downwards discretion applied significantly more than offset the value of upwards discretion.’

Executive payments may have also influenced voting at SSP Group, the owner of train station favourite Upper Crust, which saw 22% of shareholders oppose the company’s remuneration report. It is notable that SSP’s  in 2021 was down 41.8% compared with 2020, and down 70.1% compared with 2020, yet despite this the company announced that it would provide the maximum bonus of 32% for its executive team in 2022.

Remuneration policies, which are subject to a binding vote at least every three years, have also attracted negative shareholder attention as the 2022 AGM season gets underway. Compass Group proposed a policy set to bring director remuneration to market levels and increase the shareholding requirement for executive directors. However, shareholders were unconvinced by the proposal, with 32.5% casting votes against it at the . Easyjet also saw significant dissent against its remuneration policy, as 26.7% of shareholders  against it. The company addressed the opposition in a statement accompanying its results, referring to its engagement with shareholders prior to the adoption of a controversial restricted share plan, a proposal that also attracted significant dissent of 25%:

‘the Remuneration Committee undertook a thorough review of remuneration arrangements prior to the AGM, including consulting with major shareholders and employee representatives, and concluded that replacing the LTIP with a Restricted Share Plan was the best approach going forward.’

Further information on Easyjet’s restricted share plan can be found in its .

Market Tracker’s upcoming AGM Voting trend report reviews the 2021 AGM season, which saw 155 significant no votes at 81 AGMs. With the 2022 AGM season at a nascent stage, we anticipate investor dissent will continue. To remain up to date on the latest developments, our  provides ongoing coverage of FTSE 350 and AIM 50 AGM results during the 2022 AGM season.