Investors have published their FTSE naughty list of companies with the angriest shareholders

Emma Haslett
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New chief executive of the London Stock
We'll find out today whether shareholders will force out the chairman of the LSE after Xavier Rolet (pictured) was ousted. (Source: Getty)

This year has been punctuated by shareholder rebellions in businesses from WPP to Persimmon to the boardroom battle currently raging over the ousting of London Stock Exchange boss Xavier Rolet.

But now shareholder anger at FTSE bosses' pay packets has been dragged into the spotlight again, after the Investment Association launched its "naughty list" of the companies which experienced the biggest investor "no"-votes this year.

The so-called Public Register reveals some 38 per cent of shareholder rebellions in 2017 were associated with executive or directors' pay, while re-election of company directors were the second-most complained-about resolutions, making up 32 per cent of no-votes.

The document, a response by the government to recommendations on corporate governance reform, includes companies if more than 20 per cent of shareholders have voted against a resolution at an annual general meeting (AGM). It will be updated continually throughout the year.

More than one in five of the 640 companies listed on the FTSE All Share Index feature on the register, which also includes companies where at least one resolution was withdrawn before an AGM.

Read more: Crunch time: LSE shareholders to decide fate of chairman on 19 December

Thoughtful business practices

“Most companies are proactive and thoughtful in implementing responsible business practices but there are a minority of firms that threaten the world leading reputation of our business community," said business secretary Greg Clark.

“It is right that we review and refresh our standards to ensure we continue to have the highest reputation. This world-first public register does exactly that, shining a spotlight on how companies respond to shareholders’ concerns over important decisions, including executive pay packages."

But John Hunter, of the UK Shareholder Association, said investors want more proactivity.

"[The register] is a step in the right direction but it doesn't really address the issues," he said.

"What needs to be done is to have a change in the system so that these egregious pay awards aren't made.

"It's a sort of variance of naming and shaming. I think that's often quite effective, but the trouble with the current system is that... there needs to be more nuance drawn on whether any resolution is good or bad. People will just skate over it, except for the very public ones, which always get public play.

"I think an enormous register of resolutions... I'm not sure what anyone's going to do with that."

Read more: Shareholders need to get to grips with their remuneration responsibilities

The year that was: Five of 2017's most high-profile rebellions and almost-rebellions

Morrisons (executive pay)

Just under half of shareholders voted against chief executive David Potts' pay packet at its AGM in June, after his long-term share awards increased from 240 per cent of salary to 300 despite his targets being reduced.

Sports Direct (board appointment and pay)

The ever-controversial company sparked not one, but two shareholder spats this year. In September, 47 per cent of investors voted against the re-appointment of chairman Keith Hellawell after a string of scandals at the retailer - then, at an extraordinary general meeting last week, shareholders voted against awarding an £11m bonus to John Ashley, the brother of pugnacious founder Mike.

WPP (executive pay)

More than a fifth of shareholders voted against Sir Martin Sorrell's bumper £48m pay packet at its AGM in June - although that is down from 2012, when almost 60 per cent rejected his pay packet.

Barclays (executive pay)

Chief executive Jes Staley lived to fight another day in May, when 97.1 per cent of shares cast at the AGM were in favour of his re-appointment. However, just 62.9 per cent of shareholders turned out for the vote, after Institutional Shareholder Services (ISS) recommended voting against the resolution to re-appoint him.

London Stock Exchange (board appointment)

After arguably the most ferocious boardroom battle of 2017, we will find out today whether a campaign by one investor to oust chairman Donald Brydon has come to fruition. Sir Chris Hohn, manager of The Children's Investment Fund, wants Brydon out after the unexplained dismissal of chief executive Xavier Rolet.

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