Last week, the final FTSE100 AGM of the first season under the new UK DRR rules was held – and the first two DRRs to be published as part of the second season were released.  And so the cycle begins again…

AGM

The last FTSE100 AGM of the previous season to be held was that of Associated British Foods on 5 December. The season ended on a positive note with the company receiving votes in favour of 94.0% for its implementation report and votes in favour of 90.6% for its implementation report.

We now have the results of all the FTSE100 companies – it’s fair to say it has not, on the whole, been a bad first year. There were rumblings of another “shareholder spring” at certain points during the season (see our previous blog post), and some companies did receive more than 20% of votes against its report or policy (with 20% being the crucial ‘significant’ number that triggers additional disclosure requirements according to the GC100 (see our previous blog post))… However, on the whole, shareholders have voted positively on the new style DRRs.  For the current FTSE100 constituents, the average yes vote for the implementation report was 92.9% and the average yes vote for the policy report was 93.4%. All the AGM results and links to the DRRs for the first season can be viewed on our single source document.

DRRs

The two companies leading the way in the second season and publishing their reports last week were:

One of the big questions for the second DRR season is whether companies will include the policy report in the DRR given that, in the majority of cases, it will have been approved in the past season and will remain in place for up to three years. The legislation permits the policy to be omitted in years when it will not be voted on, whereas the majority of investors seem to expect the policy to be restated for completeness.  So, what’s the answer?  Well, with these first two companies, the situation differs so we don’t as yet have a uniform approach.

easyJet is putting its remuneration policy report up to vote again as it has made revisions to its policy and is introducing a new, revised LTIP. Sage Group, on the other hand, is not putting its policy to a vote and has therefore included only details of the policy that “were referenced in Committee activities in the past reporting year” (including the policy table).  A link to the previous DRR (and therefore the policy) is also included. It will be interesting to see whether other companies follow Sage Group’s lead or if any decide to completely omit the policy.

Now that the 2014/15 DRR season has started, we have a new single source document where you can find links to the new DRRs and last year’s voting results.  As and when AGMs are held, the document will once again contain the votes on the current year’s DRRs.