Boardroom bloody noses: Activist activity surges as FTSE firms feel the heat over pay and director votes
There were plenty of bloody noses around FTSE boardrooms this year, with new data out today showing a surge in investor activism rattling remuneration committees over pay awards and spooking directors trying to get re-elected to their posts.
Investors in FTSE 350 companies are increasingly more activist, with a 29 per cent surge in shareholder votes against the re-appointment of directors, according to a report from Thomson Reuters.
In total 42 directors have been subject to major dissenting votes against their re-election to the board, compared to 30 in 2020.
Those most likely to draw the ire of investors tend to sit on company audit or remuneration committees – not surprising given the slew of accounting and audit scandals and executive pay issues in recent years.
Seventeen of the 42 directors to receive substantial votes against their re-election were members or chairs of audit committees. Twenty four were members or chairs of remuneration committees and 29 were members or chairs of nomination committees, according to the Thomson Reuters data.
At listed media company Future, budget carrier Wizz Air and embattled cinema chain Cineworld’s AGMs there has been a significant minority of shareholders who opposed executive pay packages.
Even if the motions on pay and reappointments to the board still pass to approve pay at the C-suite and boardroom level, activists may already be claiming victory, with separate data from PwC this year showing CEO pay in the FTSE 100 has fallen by almost 10 per cent in the past year following increased focus on pay levels from shareholders.