The Investment Association (the IA) has issued a press release summarising the findings of an analysis of voting trends during the 2018 AGM season (1 January 2018 to 31 July 2018). The analysis is based on entries in the IA’s public register of shareholder votes (the Public Register), which tracks significant (over 20%) shareholder dissent. For background to the Public Register, see our previous commentary on BEIS’ response to proposed reforms to UK corporate governance, which considered shareholder opposition, and the subsequent launch of the Public Register.

Shareholder rebellions rose by over a quarter in 2018, resulting in 120 companies being added to the Public Register. Most notably, the analysis found:

  • Opposition to individual director re-election resolutions more than doubled from 38 in 2017 to 80 in 2018.
  • Opposition to executive pay resolutions declined slightly overall in the FTSE All-Share (68 in 2017, 61 in 2018), but substantially increased in the FTSE 100 (9 in 2017, 18 in 2018). This resulted in near double the number of FTSE 100 companies on the Public Register because of pay, up from 8 in 2017 to 15 in 2018.
  • 29 companies appeared in the Public Register in 2018 for the same resolution as in 2017.

The IA suggests this indicates that shareholders “are using their votes to hold individual directors to account” and “clearly remain unimpressed with the approach to pay, and are frustrated the message is not getting through to some boardrooms.”

Nearly two thirds of companies on the Public Register in 2018 made a public statement acknowledging the significant shareholder dissent and outlining how they plan to engage with shareholders.