Investor revolts spike with board appointments prompting anger

THE number of shareholder revolts involving board appointments has soared on last year as investors direct their frustrations towards UK bosses.

The Investment Association (IA), the trade body for Britain’s £7 trillion funds industry, said there had been a 15pc rise in the number of rebellions this year as some of the world’s best- known companies have come under fire.

Of those revolts, defined as a 20pc shareholder vote against a resolution, the IA said that there had been a 62pc increase in the number of companies facing stand-offs involving a board appointment.

Earlier this month, for example, GVC Holdings shareholders vented their anger at non-executive director Peter Isola, with 43pc voting against his reappointment on the firm’s remuneration committee.

Investors also weighed in on a member of British American Tobacco’s board earlier this year, urging an executive to step down due to claims she had too many commitments.

Of the 94 companies that have been added to the IA’S public name and shame list this year, 34 firms were added due to director-related resolutions.

Andrew Ninian, the IA’S director of corporate governance, said: “An emerging trend midway through this year’s AGM season is the increase in directors receiving high votes against their re-election.”

He added: “Directors are getting a very clear message from shareholders that they will be held accountable for their actions.” However, concern over excessive pay remains high on the agenda for shareholders too, with 40 companies facing pay-related revolts from angry investors so far this year, an increase of 14pc compared to a year ago.

Well-known names including Unilever, whose boss Paul Polman was paid more than £10m in 2017, Astrazeneca and Cineworld are among the businesses to have faced protests over their pay packages since the turn of the year.

The rise in rebellions comes six months after the IA published the world’s first ever public register naming all the companies that had opposition from at least 20pc of shareholders against at least one of the board’s resolutions.

“We now expect these companies to follow up with a further statement within six months of their AGMS, outlining the actions taken and views heard from their shareholders,” said Mr Ninian.