Shareholder revolts don’t get much worse than this
IT DOESN’T get much bigger than this. Fifty-nine per cent of shareholders refused to back Aviva’s remuneration report yesterday, either by voting against it (50 per cent) or abstaining (nine per cent). Of those who cast a ballot, 54 per cent voted against.
To illustrate how bad this is for Aviva, we need to put it into some context. There have been just two occasions in the last decade where total dissent – votes cast against plus abstentions – was greater, says proxy voting agency Manifest.
The first was a whopping 91 per cent revolt against the RBS report in 2009, hardly surprising considering the outcry over Fred Goodwin’s ridiculous pension. The second occurred in 2003, when 63 per cent voted against the £23m severance package of GlaxoSmithKline’s controversial boss Jean-Pierre Garnier.
Now say what you like about Aviva’s Andrew Moss, but he obviously doesn’t evoke anything like the kind of strong feelings that were inspired by Goodwin and Garnier. This a different kind of revolt.
Proxy season has barely started and it is already clear there will be no more Mr Nice Guy from the buy side. Yesterday, UBS and Inmarsat were victims of sizeable protest votes, while Barclays boss Bob Diamond was also under the cosh last week. Last night, Trinity Mirror boss Sly Bailey decided to walk the plank rather than face investors next Thursday. You will struggle to find anyone who will mourn her departure.
Shareholder activism has been on the increase for some years now. An average 10.5 per cent of FTSE 100 shareholders voted against remuneration reports in 2010-11, nothing compared to the 16 per cent or so in 2002-3, but much higher than the six to eight per cent that was the norm between 2004 and the crisis.
Here’s hoping this flurry of bloody noses is a sign of things to come.