Brace yourself, bosses: Leading investor reveals it shot down resolutions at almost one in five AGMs last year

Hayley Kirton
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It may feel like 2016 is the year of naysayers, but one investor says it has been at it since 2015 (Source: Getty)

As companies such as Shire and AstraZeneca brace themselves for a rocky AGM season, one major asset manager has today revealed that it has been voting no for some time now.

Legal & General Investment Management (LGIM), which held assets worth over £750bn at the end of 2015, has revealed that it shot down at least one resolution at 18 per cent of the UK company meetings it voted at in 2015, with roughly 50 per cent of its “No” votes relating to pay.

However, the investor is also concerned about a lack of transparency in corporation tax practices, and would also like to see more companies introduce external audits for cyber security.

The investing giant's willingness to speak out knows no boundaries, as it also revealed that it had seen a significant increase in the number of times it voted against resolutions at AGMs overseas, particularly in the US and Europe.

Read more: Even City bigwigs think it's time to overhaul exec pay

"Active ownership of the companies in which we invest is at the heart of what we do as an asset manager," said Sacha Sadan, director of corporate governance at LGIM. "We believe that good corporate governance adds value, while poor governance can destroy it. This impacts not just equity investors, but investors across all asset classes."

LGIM also announced that it has voted against BP chief executive Bob Dudley's $19.6m (£13.6m) pay deal at the oil giant's AGM earlier this month.

Read more: Martin Sorrell defends £63m pay package: "If WPP does well, I do well"

Meanwhile, pharmaceutical firm Shire became the latest company to find itself in the line up for the shareholders' firing squad this weekend, as the Sunday Times reported that investors were less than impressed with chief executive Flemming Ornskov's 25 per cent salary rise.

It was reported that both the Institutional Voting Information Service and the Institutional Shareholder Services have urged shareholders to vote against the remuneration package at Shire's AGM on Thursday, although neither of the advisory groups have yet responded to City A.M.'s request for comment.

A Shire spokesperson said: "The company is now well-positioned to become the global leader in rare diseases. The chief executive remuneration package reflects this tremendous performance and, with its focus on rewarding long-term value creation, is firmly aligned with shareholder interests."

A top three investor revealed it had voted in favour of the remuneration policy because "Shire needs to compete equally to recruit and retain the best talent in the context of its global biopharma peer group and we believe that this is in the interest of all shareholders".

Meanwhile, Royal London Asset Management told City A.M. last week that it had decided to vote against AstraZeneca chief executive Pascal Soriot's £8.4m remuneration deal, while Pensions and Investment Research Consultants is urging other shareholders to do the same at the AGM on Friday.

Read more: Executive pay is broken: How to reform it to restore public trust

Although some may have been concerned about the start of a new shareholder spring when 59 per cent of shareholders voted against Dudley's pay earlier this month, last week proved much calmer for boardroom pay.

Although 41.6 per cent of Anglo American shareholders voiced their discontent over chief executive Mark Cutifani's £3.4m pay packet, just 15 per cent said no to Centrica boss Iain Conn's pay deal while 90.49 per cent of HSBC's shareholders agreed to pass the bank's remuneration report.

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