Thursday, 10 June 2010

Interesting exec pay vote

Get a load of this at Afren. On a straightforward votes for and against split the remuneration report barely scraped through, but look at the number of abstentions. Include them and the vote actively in favour is just 40%. There's a similar story with the vote on the election of non-exec John St John. Votes against and abstains add up to about 46%.

It does make me wonder a bit why investors abstain on some of these things, pay votes especially. I understand the argument that it allows you to gradiate your approach, but what should shareholders conclude the actual result is in Afren's case? Legally they won the vote, but 60% of shares didn't support the company policy. I would always argue that faced with a vote of this magnitude the board ought to speak to those shareholders who opposed it. But when there's a big number of abstentions like this (which I'm guessing it may be driven by a RiskMetrics recommendation) essentially the company has been given a message that is simultaneously very loud (voting level) and unclear (voting decisions). If those abstains had been added to either side the message would be much simpler to interpret. Ho hum.

Also a quick moan about journos - I'm surprised at how many votes like this slip past the financial and other specialist media without comment. If you were on an energy mag or similar surely you'd be tracking the AGMs of all the PLCs in that sector? And why doesn't someone on the FT or WSJ have the job of checking RNS announcements for AGM results? All I did to find this result was Google the "Afren AGM result RNS". Not difficult.

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