RLAM reveals AGM votes on Aviva, Standard Chartered and Reckitt Benckiser
28 April 2016
Royal London Asset Management (RLAM), one of the UK’s leading fund management companies, has revealed its voting intentions at the annual general meetings of three major FTSE 100 companies next week: Aviva, Standard Chartered and Reckitt Benckiser. The announcement follows several shareholder rebellions against executive remuneration at the annual general meetings of some of Britain’s biggest companies.
Commenting on the annual general meetings so far this year, Ashley Hamilton Claxton, Corporate Governance Manager at Royal London Asset Management, said:
“This year has seen a ‘spring of discontent’ for a number of major British companies, with shareholders demonstrating their unhappiness at the remuneration packages awarded to top executives last year at a time when company performance was lacklustre at best.
‘While we continue to vote in a similar manner to previous years, it is encouraging to see a number of major institutional investors following our lead, both in their voting intentions and in speaking out publicly.
“Our view is that pay should remain tied to performance and feel it is important to recognise companies where the board has engaged productively with shareholders. On this basis, we are happy to highlight companies who have taken encouraging steps regarding executive remuneration, as we have done with Aviva.
“Where votes against remuneration reports have been high, several key themes stand out; Complex long-term remuneration strategies, cash ‘top-ups’ via pension payments and a failure to use common sense and discretion. These themes contributed to shareholder rebellions over executive remuneration at BP and AngloAmerican.”
1. Aviva plc (AV.) – AGM 4 May 2016
Royal London will be voting for the remuneration report.
Ashley Hamilton Claxton commented:
“We are pleased to see that Aviva has reduced its LTIP grant, following discussions with shareholders and proxy agencies. As such, we will be voting for their remuneration report. This is a clear example of a board being sympathetic to both the views of investors and the public mood. We encourage more companies to follow Aviva’s example.”
Royal London holds 1.57% of the outstanding share capital in Aviva, worth £278.3m
2. Standard Chartered plc (STAN) - AGM 4 May 2016
Royal London will be voting for the binding pay policy but will vote against the annual remuneration report at Standard Chartered.
Ashley Hamilton Claxton commented:
“We welcome the simplification of the remuneration structure and the move towards longer-term remuneration under the new pay policy. We are supportive of the decision not to award annual bonuses at Standard Chartered during a year in which the company missed financial targets.
“We remain concerned that the high pension benefits for executives provide a cash ‘top-up’ to salaries not tied to performance.”
Royal London holds 0.64% of the outstanding share capital in Standard Chartered, worth £117.9m.
3. Reckitt Benckiser Group plc (RB.) – AGM 5 May 2016
Royal London will be voting against the remuneration report.
Ashley Hamilton Claxton, Corporate Governance Manager at Royal London Asset Management, said:
“It would appear that the board continues to misjudge the mood of investors and we believe that a number of shareholders, ourselves included, will vote against the pay proposal this year. Whilst Reckitt Benckiser has provided consistent growth for shareholders, its pay awards for executives consistently pushed the boundaries of acceptability in the UK. Having weathered shareholder anger in the past, we hope that the vote this year will be a tipping point for Reckitt Benckiser’s board.”
Royal London holds 0.54% of the outstanding share capital in Reckitt Benckiser, worth £254.1m.
As we near the half-way point in this year’s AGM season, there are still some key meetings to take place. These being:
- Man Group AGM 6 May 2016
- Royal Dutch Shell plc AGM 24 May 2016
- WPP AGM June 2016 (TBC)
NB. All figures correct as of 28 April 2016
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Notes to Editors:
About Royal London Asset Management (RLAM):
Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.
RLAM manages over £84.5 billion of assets and employs 75 investment professionals. It invests in all major asset classes including UK and overseas equities, government bonds, investment grade and high yield corporate bonds, property and cash.
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £84.5 billion. Group businesses provide around 9.1 million policies and employ 2,988 people. (Figures quoted are as at 31 December 2015).