Bosses warned over ignoring shareholders
THE bosses of well-known companies including WPP, AstraZeneca, the AA and Entertainment One have been accused of repeatedly ignoring investor complaints and have been named and shamed on a new register.
The Investment Association (IA), the trade body for Britain’s £8 trillion funds industry, has sent letters to the chiefs of 32 listed companies demanding to know why at least 20pc of shareholders have opposed one or more of the board’s resolutions for two years running.
Its letter warned the businesses that they will now be named on a new “repeat offenders” list of UK firms that have experienced the same revolts year on year. The public register will go live today. “A repeat appearance for the same resolution highlights that a company is either not responding sufficiently to investor views or the engagement process is not working effectively,” the letter read.
Shareholder protests have risen 22pc on last year, with rebellions typically related to excessive pay packets or the re-election of company directors.
AstraZeneca’s chief executive faced a backlash over his pay in May, while almost a third of WPP shareholders rebelled against departed boss Sir Martin Sorrell’s huge remuneration package in June amid claims that he was being investigated for the misuse of company funds to pay for a sex worker – allegations he strenuously denied. A spokesman for WPP said that the company had “engaged extensively with shareowners” on the “unique nature” of Sir Martin’s 2008 employment agreement.
Other names on the IA’s list include Entertainment One, the company behind which faced a shareholder revolt over pay in September, as well as betting giant GVC, whose shareholders voted against the FTSE 100 firm’s remuneration report in June.
“While many companies are taking the necessary action and engaging with their shareholders, a frustrating number are failing to address investor concerns,” said the IA’s director of corporate governance Andrew Ninian.
“We hope that the increased focus on these repeat offenders will encourage them to engage with shareholders.”