Company responses to high shareholder votes against exec pay

As I've blogged previously, the new version of the UK Corporate Governance Code requires companies to make a statement in response to large votes against them. This was introduced due to concerns that companies were treating near misses on exec pay votes as "wins" and carrying on as before.

In the past week or so we've already have three pretty chunky votes against exec pay at BBA, Man Group and Ladbrokes. So how have they responded? Here are their respective blurbs issued alongside their AGM results.

BBA:

The Board is disappointed to note that whilst the resolution to approve the Directors' Remuneration Report was passed with the requisite majority, there were a significant number of votes opposing the resolution and a significant number of votes withheld.  We have already engaged with certain shareholders to discuss their concerns relating to our Remuneration Report and we will continue to take appropriate steps through our ongoing contact with shareholders to ensure that we fully understand their concerns.

Man Group:

While the Board notes that there were a significant number of votes cast against Resolution 2 (approval of the new Directors' remuneration policy) and Resolution 3 (approval of the Directors' remuneration report), it has found that, as part of an extensive period of engagement with the Company's major shareholders ahead of the AGM, the majority of those shareholders with whom the policy proposals were discussed were supportive.
The changes to the remuneration policy approved by shareholders provide the Board with additional flexibility to reward any higher levels of future performance at an appropriate level, taking account of the competitive dynamic of the global hedge fund industry within which Man Group operates.  The vote on the remuneration policy is an enabling vote only and actual awards will continue to be determined by performance. The Board has demonstrated its disciplined and rigorous approach to remuneration decisions in the past and will maintain these standards in future. Shareholders will have the opportunity to express their views on the Board's judgement in applying the new policy to future reward decisions through ongoing consultation and ultimately through their vote on the Directors' remuneration report each year. We will continue our efforts to engage with our shareholders and take account of their views in the coming year.

Ladbrokes:

The Board notes the vote in respect of the Directors Remuneration Report. Ladbrokes has spoken with several shareholders about the termination arrangements for Richard Glynn where his contract required that any settlement had to be determined in line with UK damages principles.  The Remuneration Committee confirms that contracts of this type are not appropriate and termination arrangements for the current executive team, including Jim Mullen who was appointed CEO on 1 April 2015, are determined on payment in lieu of notice (PILON) principles in line with best practice.  The Remuneration Committee further notes that Jim Mullen was appointed on a lower salary and shorter notice period than the previous CEO.

So I think those translate roughly as "we'll keep talking to our shareholders", "we've talked to our shareholders and the ones that count agree with us, it's all good and anyway have a go again next year if you don't like it" and "fair cop, we won't do it again". Man Group looks to me to be least in line with the spirit of the Code.

UPDATE: actually I just realised that Ladbrokes was one of the companies whose previous behaviour was cited by a few people as a reason why there should be a requirement to respond to high votes. What they said in 2011 is a bit of a classic.