As most sixteen to eighteen year-old British kids get stuck into the most important exams of their lives, how did the FTSE100 companies holding AGMs last week fare as shareholders announced their marks for fourteen Directors’ Remuneration Reports?
In truth, this was a mixed week of results.
Two companies (Petrofac and Melrose) were given low grades for the policy reports. Yet again, it seems that refusing to put a cap on the pay packets of future executives cost marks for at least one of these companies. This has been a recurring theme since the new rules took effect (see our previous blog post). The future policies for the other twelve companies suggests an almost even split of “A*” and “A” grades. Given that the rules are new, most Remuneration Committees are probably relatively satisfied with these marks.
With all but three of the companies achieving “A*” grades in the implementation report, it looks like most of the companies got their pay “right” during 2013, at least in the view of their shareholders. However, it was a tougher set of grades for BG Group, ITV and Lloyds, all of whom it appears will have more work to do before next year’s tests. BG apparently tripped up after granting share incentives that Guy Jubb of Standard Life allegedly described as “the significant rewards to the executives under the long term performance share scheme, which can amount to the equivalent of 150pc of salary.” Consistent with most companies that have faced shareholder resistance to the implementation section of their DRRs, it seems that none of BG, ITV or Lloyds chose to make a statement about the lack of support at the time of announcing their results.
The rate of FTSE100 AGMs slows down this week with the December year end companies’ AGMs coming to an end. The five companies holding their AGMs this week will all be hoping for top marks too. Our single source document contains details of the votes and the companies that have published their DRRs so far.