Bosses warned over ig­nor­ing share­hold­ers

The Daily Telegraph - Business - - Business - By Lucy Burton Peppa Pig,

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.”

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