Saturday, 18 May 2013

Back from beyond / pay votes

I've spent the last week in and around a yurt in Cornwall, hence the total lack of blogging action. But I have a couple of (hopefully) interesting snippets/posts to come.

Also, having had a quick read through a few AGM voting results I think it is safe to say that Shareholder Spring 2: The Revolution Continues has not happened. The two (pay) votes I was particularly keeping an eye on were RSA and the Pru. The former because of the dividend cut, the latter because of the FSA fine and criticism of the chief exec. The Pru saw an 11.6% vote against well down on the 33% against last year. RSA saw an even lower vote against at 9% (up from 6.5% last year). 

The lack of action is not surprising to me or, I suspect, most people in the corp gov/RI microcosm. As I have blogged previously a) this is what we should expect based on previous experience (am thinking here of the way pay votes declined in the run up to the crisis after an initial spike) and b) we already have some indication of how a drop off in votes against would be explained by the mainstream of the investment industry.

For what it's worth I think that if votes against pay are down across the board this season this may have been an error of judgment by the UK's institutional investment community. People might start to ask what the point is of giving shareholders a binding vote on pay if they aren't going to use it. I recognise that the dynamics of shareholder engagement over pay are more complex than this. However, that isn't how it looks and arguably one of the important considerations currently is that shareholders are seen to tackle executive pay.

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